NEWARK, NJ — Three weeks after announcing the city was in danger of a $143 million budget deficit without federal funding, Newark’s mayor is reporting that his administration is anticipating furloughs for city employees as soon as June as a result of the coronavirus’ financial impact.
While Mayor Ras Barka said the city’s revenue shortfall isn’t yet as dire as the numbers provided on April 23, losses are significant in terms of municipal taxes and special taxes, which come from commercial hotels, parking and payroll from businesses that are not operating.
The city has sent contingency plans to the New Jersey Civil Service Commission for a decision to be rendered. Baraka said he is hoping to bond against any layoffs with a bill from Senate President Steve Sweeney that passed through committee this week, which would partially furlough 100k state and local employees.
A furlough is a temporary leave of employees due to economic conditions. City employees would file for unemployment and receive benefits until the budget is healthy enough to bring them back.
“We’re prayerful that the Menendez bill is voted on and Mitch McConnel does not stand in its way, and that we get the funds we deserve and don’t have to lay people off,” Baraka told TAPinto Newark on Wednesday, referring to a bill co-written by Sen. Bob Menendez called the State and Municipal Aid for Recovery and Transition (SMART) Fund.
The SMART Fund would provide $500 billion in flexible relief with priority for the country’s most affected states. In cities like Newark, where more than 500 people have perished and more than $11 million in expanded testing is being invested to begin to reopen the city, the funding is desperately needed.
The city has spent about $11 million in related costs like free PPE for residents and emergency grocery relief. Officials said they project an additional $32.6 million in spending through the summer, not including the expansion of testing. Business Administrator Eric Pennington said in April that the city had instituted a hiring and spending freeze while officials look for ways to fill the holes until help arrives.