New Jersey ordered Trenton to cover a $14 million bond payment blocked by a warring city council, seeking to prevent a local budget fight from driving the state capital to default on its bonds.
The city of 90,000, where more than 1 in 4 lives in poverty, has been meeting payroll and other bills on an emergency basis because the council has failed to vote on a proposed $227 million budget that was due on April 29.
In a letter to Mayor Reed Gusciora, state officials outlined how the city council also deadlocked on authorizing debt payments for water, sewer and school district expenses.
“In the absence of either an approved emergency temporary resolution or CY 2022 adopted budget, I am hereby directing the city administration to make the bond payments in the amount of $14,409,675.04 to avoid default on the bonds,” Jacquelyn Suárez, director of local government services for the state’s department of community affairs, wrote on Wednesday.
New Jersey has a long track record of ensuring its municipalities don’t collapse into fiscal distress. The state stepped in to assist Atlantic City when it veered toward default on its debts after its casino industry faltered.
The state provides Trenton with more than $40 million in budget aid while vast swaths of abandoned homes and former industrial sites go untaxed. As a condition of some aid, the state has oversight of Trenton’s hiring, procurement and other spending.
Gusciora, in a telephone interview, said the payment will be made by the July 15 deadline. He also said he is asking the state to take over the budgeting process, but doesn’t expect that to happen.
“They’re reluctant to take sides,” he said of the state’s community affairs department. Tammori Petty, a department spokeswoman, didn’t immediately respond to an emailed request for comment.
At recent meetings, City Councilwomen Robin Vaughn and Kathy McBride have engaged in tirades with one another over budget details and other city business. At a July 5 meeting, Vaughn, screaming, accused McBride of not doing her job. “Hush your mouth!” McBride responded.
Neither Vaughn nor McBride immediately responded to phone messages asking for comment. Vaughn since 2020 has resisted requests to resign by leaders including Governor Phil Murphy for a series of remarks criticizing immigrants and Jewish and gay people.
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