City Hall issued a press release from today, announcing plans to begin layoffs. The layoffs will affect between 300 and 400 employees to close the $180 million budget gap for the 2008 fiscal year.
Mayor Cory A. Booker and Business Administrator Bo Kemp today announced that the City of Newark has begun the state process of identifying personnel titles in order to involuntarily separate between 300 and 400 employees from the City of Newark.
“We are continuing to move forward with our plan to balance this budget on time and in a way that provides the least amount of pain for residents and avoids a tax increase for 2008,” said Mayor Booker. “While we are looking at additional ways to close the budget gap, we have come to a point where we must begin the process of separating municipal employees from the city.”
For the 2008 budget, to close a $180 million gap, the city is relying on one-time revenue streams from the Port Authority ($40 million) and state aid ($45 million), as well recurring revenue in the forms of $20 million in special taxes and $20 million in reduced expenses (i.e. overtime and health care savings). Employees that were accepted for the Voluntary Separation Incentive Program saved the city approximately $13 million, and it is anticipated that layoffs will reduce the budget number by another $25 million. This still leaves about a $20 million gap to fill.
The Administration has asked the Municipal Council to work in collaboration to mitigate the impact of layoffs and reduce costs by coming up with other ways to generate savings. However, Mayor Booker has noted that other radical means of saving money will also be considered.
At the beginning of his tenure, Mayor Booker outlined the city’s financial situation and highlighted the previous years of waste and mismanagement. In the beginning of July, Mayor Booker announced that layoffs would be eminent.
“We no longer have the luxury of time,” said Mayor Booker. “Newark is in a dire financial situation that requires everyone’s assistance and input. From our State Legislature, to Municipal Council to our residents, all ideas will be considered.”
The City has proactively begun conversations with the corporate community to help lessen the consequences of layoffs. The City is working with various local non-profit and private entities to identify numerous resources for potentially displaced workers so that they have an opportunity for employment.
The Administration is looking to avoid reducing the number of positions that directly impact city services such as sanitation and recreation. All civilian titles and administrative jobs will be impacted, including those in the Office of the Mayor and Business Administrator. The Administration will not guarantee that city services will not be affected by this reduction.
It is estimated that it will take 75-100 days for the city to actually separate from employees and there is a need to move quickly to avoid layoffs during the holidays and budget negotiations.
One Trackback
[...] to draw in outside investors and raise private capital. After just narrowly having covered a city budget shortfall of $150 million, this city needs private investors willing to take a reasonable amount of [...]