Newark Has Strategy to Fill Deficit Without Firings, Baraka SaysTerrence Dopp
Newark Mayor Ras Baraka said he’s found a way to close a $93 million budget hole through a mix of cuts and lowered debt payments, enabling him to avoid firing city workers.
Baraka, who took office three months ago, will restructure debt on Housing Authority bonds to save $5 million and will find $16 million by cutting expenses such as stationery, travel and software, he said in a statement. The city will also receive $10 million in aid from the state, which must approve the plan, Sakina Cole, a mayoral spokeswoman, said today.
Baraka, who has called the deficit his most immediate challenge, in August announced plans to trim the deficit to $30 million by reducing employee car and telephone use, freezing hiring and increasing tax collections. The city also has sold property and entered into a collective-purchasing agreement with Jersey City and Paterson, Cole said.
“We are not relying on Trenton to make Newark prosperous,” Baraka said in the statement. “These measures, combined with our work with the State, will erase the deficit and put our City on a stable financial platform.”
Baraka, 44, won election in June promising economic growth throughout the city of 278,000 about 13 miles (21 kilometers) west of Manhattan. New York-based Moody’s Investors Service in May lowered the rating on almost $575 million in city general-obligation debt, citing an increased reliance on cash-flow borrowing, late budgets and high poverty. Forty-two percent of its real estate is non-taxable. Moody’s gave the city a negative outlook.
The mayor will present the amended budget to the city council by Oct. 14, Cole said.