RUMANA: DISTRESSED CITIES AID EXPOSES FLAWS IN STATE’S DISTRIBUTION OF MUNICIPAL AID

WHILE $191 MILLION IN AID IS CUT TO MANY SMALL TOWNS, SPECIAL AID TO ‘DISTRESSED CITIES’ HAS BALLOONED 

Assemblyman Scott Rumana today said that the ballooning “distressed cities” aid to several urban municipalities over the past few years demonstrates why the state’s manner of distributing funds to municipalities is flawed and how this aid distribution fails to take into account efficiency.

“There should be some consistency in the way aid is awarded and towns that have a history of wasting tax dollars should not be rewarded with additional state aid,” said Rumana , R-Passaic, Bergen and Essex. “There is something wrong with a municipal aid system that cuts funding to many small towns that are operating with model efficiency while providing aid to larger towns where widespread waste and abuse has been documented.”

The Special Municipal Aid Act program provides financial assistance to a number of urban municipalities with structural deficits that cannot be resolved without additional State funds. Under the proposed budget for FY 2009, there is an appropriation of $145,350,000.

Last year the state distributed $171 million of this “aid to distressed cities” to Asbury Park, Bridgeton, Paterson, Camden, Union City, Ewing, and Harrison Township. As recently as Fiscal Year 2004 the state only provided $28 million to these cities from this program.

Until this year there had never been an application process and the amount of aid and who received that aid was at the discretion of the administration.  Funding was initially proposed to be temporary, to help a town through a one or two year period of fiscal distress, but some towns, such as Camden and Paterson are perpetual recipients of this aid.

Meanwhile the Corzine FY2009 Budget is cutting aid by $191 million, mostly targeted at smaller suburban and rural communities, in his effort to force these towns to be more efficient.

“You cannot reasonably cut aid to some towns saying that they need to operate more efficiently, while continuing to provide millions of dollars in aid to cities like Camden where auditors and investigations have turned up millions in waste and abuse,” said Rumana. “If Governor Corzine wants to achieve savings he should look at how some of these towns receiving special municipal aid operate and he might find some real opportunities to improve efficiency.”

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