Newark councilman threatens to sue state over 'meager' aid package

East Ward Councilman Augusto Amador said the $10 million in transitional aid the city received this year was unfair compared to packages received by smaller communities home to fewer state agencies

Newark Councilman Augusto Amador, shown here in a file photo. (Tim Farrell/The Star-Ledger)

NEWARK - City leaders are still fuming over the state's handling of their budget, and at least one is prepared to take the matter to the courtroom.

East Ward Councilman Augusto Amador in recent weeks has repeatedly proposed suing the state to demand it either increase the city's share of transitional aid, or provide other concessions to account for the various state agencies housed in Newark, none of which provide Newark with tax revenue.

"Its not fair for the state of New Jersey to treat us this way. We need to continue to fight," he said.

Resentment toward Trenton is commonplace in Newark, where the state controls both the city's schools and much of its finances. Last month, however, the Local Finance Board's decision not to allow the use of $13.3 million in Redevelopment Area Bonds from a settlement with PSE&G and adopted a budget with a 9 percent city tax increase without a council vote, sending the executive body into a fury.

"The biggest function we have as a council is to approve the city budget, and we were deprived," At-Large Councilman Carlos Gonzalez said this week. "We are being emasculated here. We are losing all the power, or any power that we may have had, to the Local Finance Board."

In a Tuesday interview, Amador cautioned that he was hoping to review how the state treated other communities that receive transitional aid, the number of state agencies they house and the level of budget oversight they received before pursuing any further action.

He has repeatedly cited smaller towns such as Kearny and Atlantic City as examples of the perceived inequity. Kearny received $1.5 million in transitional aid this year, while Atlantic City received $13 million, as well as $33.5 million in casino tax typically reserved for redevelopment projects. Newark received $10 million in aid in both 2014 and 2015.

"I need to know how many entities are involved, and what was the behavior of the Local Finance Board in regard to Newark, versus the rest of the municipalities," Amador said.

"Why should we be treated differently for a meager $10 million?"

In an interview earlier this month, Local Finance Board Chairman Tim Cunningham stressed that the needs of each community under state oversight are examined on an individual basis, and said it would be unfair to compare Newark's financial issues with the "incredibly unique" challenges in Atlantic City.

"We look at how much state aid will they need to adopt a balanced budget that compiles with all laws. We determined the amount of aid was sufficient to reach that," he said.

While a lawsuit against the state may seem like a long shot, the concept is not without precedent in Newark. In 1998, officials filed suit against the Port Authority of New York and New Jersey in hopes of extracting a large payment from the agency for the land it uses in the city - an effort that eventually proved successful.

Amador, who joined the council the same year that suit was filed, claims that many of the same arguments might apply to state-owned properties based in the city, such as Rutgers-Newark and the Passaic Valley Sewerage Commission.

"I think there's a way of finding a happy medium, if the state wants to sit down and kind of come to terms with the city of Newark," he said. "We need to be treated in a more respectable manner by the state in terms of our contributions to the state."

Other officials, including Council President Mildred Crump, have also advocated for rebellion against the state, calling for residents to organize and formally protest its tact toward the city.

At least one leader, however, is preaching caution. On Tuesday, Mayor Ras Baraka told the council that the Newark's relationship with the state is "historically different", and said the denial of the one-time PSE&G revenue was a lesson that would color his approach toward next year's budget.

"It's not a negotiation. We don't negotiate with the Local Finance Board," he said. "They either approve it or disapprove it. That's it."

Dan Ivers may be reached at divers@njadvancemedia.com. Follow him on Twitter at @DanIversNJ. Find NJ.com on Facebook.