N.J. Board Puts Newark Under Supervision as Part of Deficit Fix

A New Jersey panel that oversees spending by towns and cities voted to place Newark’s finances under state supervision as part of Mayor Ras Baraka’s plan to close a $93 million budget deficit.

The Local Finance Board voted unanimously today in favor of the move, which lets New Jersey’s largest city spread out $30 million of last year’s deficit over a decade. Baraka, 44, also is cutting expenses such as travel, stationery and software and lowering the city’s payment into a state fund that administers public workers’ unemployment benefits.

Newark’s city council yesterday unanimously approved Baraka’s $815 million budget, which also includes $10 million of state transitional aid. The mayor, who took office three months ago, said the oversight agreement was reached by both the state and city. He characterized it as “amicable” and said the exact terms are still being negotiated.

“It’s a partnership -- we filed jointly,” Baraka said outside the meeting in Trenton. “It’s the law. We had to get permission to spread the debt out. The law says if you do that, the state needs to come in and supervise that.”

Baraka said the oversight could range from keeping an eye on Newark’s finances to state control over hiring and employees, as well as contracts.

Tammori Petty, a spokeswoman for the state Department of Community Affairs, said the board still has to approve the full spending plan at a special meeting Oct. 14. In another vote today, the panel also authorized the city to borrow $8.42 million to cover payments to residents who appeal their tax assessments.

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