Testa demands state control over Newark’s finances after $52M in aid
TRENTON, N.J. – A New Jersey lawmaker is calling on Gov. Phil Murphy to place Newark under state financial oversight after the city received $52 million in special state aid across two years without applying for the Transitional Aid program required by law.
In a letter sent Tuesday, Sen. Michael Testa (R-01) blasted the Murphy administration for what he called “gifts” to Newark — $22 million last year and a promised $30 million this year — accusing the city of evading statutory oversight while running a deficit.
“Apparently, tossing Newark $22 million with no strings attached wasn’t the end of this charade,” Testa wrote. “Your administration recently promised Newark another $30 million ‘loan’ to patch up the current budget, which was allowed to run amuck while the Mayor ran for Governor, and which will end the year in deficit without the fiscal restraint or a massive property tax increase.”
Under state law, municipalities receiving Transitional Aid must agree to oversight by the Department of Community Affairs (DCA), including state approval of hires, raises, contracts, and land deals. Testa said Newark never applied for Transitional Aid but still received $52 million directly, bypassing rules applied to other towns.
Testa pointed to his district’s cuts — including losses of $440,250 for Millville and $644,737 for Vineland — as examples of municipalities making “hard decisions” while Newark received special treatment.
Newark is expected to adopt its latest budget on Sept. 24, which includes the new $30 million allocation. Testa warned that if Newark is not held accountable, the burden will fall on the next governor.
Neither Murphy’s office nor Newark Mayor Ras Baraka has publicly responded to Testa’s demand.
A copy of the letter is below:
Dear Governor Murphy:
I am writing to demand that your administration place the City of Newark under state oversight in return for the special $22 million your administration gifted the City last year. The same state oversight should continue if your administration moves forward with an additional—and notably larger—$30 million gift your administration recently promised Newark to end its current year. Indeed, state law requires such oversight, and the matter is not one of discretion.
Last September, your administration gave $22 million to Newark to prop up a profligate and unbalanced budget so the Mayor could avoid difficult decisions while running for Governor. The grant was disingenuously labeled a “loan” to circumvent a statutory requirement that municipalities receiving grants to address unbalanced budgets must be placed under state oversight. Not surprisingly, the City is defaulting on its first required repayment of the “loan.” It should be clear they have no intention of ever repaying it.
Apparently, tossing Newark $22 million with no strings attached was not the end of this charade. Your administration recently promised Newark another $30 million “loan” to patch up the current budget, which was allowed to run amok while the Mayor ran for Governor, and which will end the year in deficit without fiscal restraint or a massive property tax increase. That $30 million is embedded in the City’s recently introduced budget that its council intends to adopt on September 24. Ironically, the City has one of the fastest-growing imbalances and some of the most notorious waste, yet it is being treated with kid gloves and unlawfully allowed to circumvent the same rules everyone else must follow.
Your administration cut $150 million in aid that impacted every municipality this year. In my own district, Millville lost $440,250 and Vineland City lost $644,737. They made hard decisions to balance their budgets. Other municipalities that sought special assistance were required to apply for Transitional Aid, await merit-based decisions and awards, and agree to first obtain state approval for hires and contracts.
If you look the other way while Newark does not repay its outstanding loan and dole out another $30 million without supervision, the financial mess will worsen for the next Governor. Unless he or she has made a special deal with Newark to continue the favoritism, the practice of slashing everyone else’s municipal aid while shoveling money at Newark will come to an end.
I sincerely hope the right thing is done sooner rather than later.
Sincerely,
Senator Michael L. Testa Jr.
Key Points
- Sen. Michael Testa urged Gov. Murphy to put Newark under state oversight after $52M in aid.
- Newark received $22M last year and expects another $30M this month without applying for Transitional Aid.
- Testa said other municipalities faced aid cuts while Newark avoided oversight requirements.
A budget battle over Newark’s finances is now spilling into the State House.
