Bloomberg News

New Jersey Assembly Passes Bill Raising Distressed Cities’ Aid

December 06, 2011

Dec. 5 (Bloomberg) -- New Jersey Assembly lawmakers passed a bill to raise transitional aid by $140.5 million for 11 cities in fiscal distress, including six with barely enough cash to last the month.

The Democratic-sponsored legislation passed 67-11, and may be voted on in the Senate by Dec. 15. The measure went straight to the lower chamber floor for a vote, bypassing the usual committee hearings, under an emergency procedure that required support from at least three-quarters of the 80 members.

“The need was dire,” said Assemblyman Vincent Prieto, a Democrat from Secaucus who sponsored the bill. “Many of these municipalities cannot afford to make their payments for debt and essential services without it.”

Governor Chris Christie, a first-term Republican, had reduced transitional aid to $10 million in the $29.7 billion budget he signed in June. He then agreed to increase the amount by $139 million in a supplemental spending bill as long as his administration got more power over the assistance program.

The Democrats’ version of that plan adds $1.5 million for the cost of oversight. The governor’s measure subtracted that cost from the aid granted under the bill. Michael Drewniak, a spokesman, wouldn’t say immediately whether Christie supports the $1.5 million increase.

Democrats control the Assembly 47-33. Republicans agreed to support the emergency procedure, Alex DeCroce, the chamber’s Republican leader, said in a Statehouse interview.

‘Long Overdue’

“It’s something we’re all comfortable with,” DeCroce, who is from Parsippany, said before the vote. “It’s long overdue.”

Senate President Stephen Sweeney, a Democrat from West Deptford, said he expects his chamber to give final approval to the bill by Dec. 15. “I think this is a very reasonable compromise,” he said in an interview in a Statehouse hallway.

Six of the 11 cities waiting for their share of the extra assistance operate on a calendar-year basis, giving them less than a month to make their cash last. The aid is described as transitional because it’s supposed to help the most financially distressed communities reach fiscal stability. The grant program is scheduled to end in 2014.

Last week, Terry Reidy, city manager of Asbury Park, said he was considering short-term borrowing to pay municipal workers because he may run out of cash by mid-month. The town of Harrison was shifting money among municipal accounts as it awaited $4.5 million, according to Gabriela Simoes, chief financial officer.

Even with the increase, the transitional aid budget of $150.5 million would be 5.3 percent less than the $159 million set aside last year, the result of Christie’s promise to phase cities and towns out of the program. Assistance went to 22 municipalities last year.

--Editors: Ted Bunker, Mark Schoifet.

To contact the reporters on this story: Elise Young in Trenton at eyoung30@bloomberg.net; Terrence Dopp in Trenton at tdopp@bloomberg.net.

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


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