Gov. Phil Murphy is facing criticism from Republican state Sen. Michael Testa, who claims the administration funneled $52 million to Newark over two years to cover budget gaps and boost Mayor Ras J. Baraka’s run for governor.
Testa, a member of the Senate Budget and Appropriations Committee, raised the issue in a letter Tuesday. He pointed to $22 million provided in 2024 and another $30 million pledged for 2025, which Newark officials have described as loans.
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“Last September, your Administration gave $22 million to Newark to prop up a profligate and unbalanced budget so the mayor could avoid difficult decisions while running for governor,” Testa wrote. He argued the funds were disguised as loans to avoid a law requiring state oversight when grants are used to balance local budgets.
Testa demanded that Newark be placed under state fiscal supervision, calling the loans “gifts.”
Murphy’s office declined to comment. Newark officials, however, pointed to an Op-Ed from Baraka, who insisted the money was not a gift but zero-interest loans needed to cover higher county taxes tied to rising property assessments. Without the loans, Baraka said, the city would have faced a 30% property tax hike—unrealistic in a city where the average annual income is $36,000.
Baraka finished second in the June Democratic gubernatorial primary to U.S. Rep. Mikie Sherrill, though Murphy stayed neutral in the race. Sherrill faces Republican Jack Ciattarelli in the November election.
Newark’s $970.2 million 2025 budget, introduced August 28, includes a $564 tax increase for the average homeowner. Last year’s budget brought a smaller $190 hike. City officials said the loans helped bridge gaps caused by years of undervalued property assessments, which left Newark owing Essex County under a process known as equalization. A citywide revaluation is underway but won’t be complete until 2027.
Testa questioned Newark’s repayment plans, noting its 2025 budget omits a $4.4 million payment supposedly due this month. He argued that neither Newark nor the state budget reflects any repayment expectations. Newark officials countered that the loan agreement delays repayment until September 2027.
Testa also criticized Murphy for cutting $150 million in municipal aid statewide, including $440,250 from Millville and $644,737 from Vineland—both in his district—while sending millions to Newark.
He warned that Murphy’s successor will inherit the fallout if Newark is not required to repay its debts: “If you look the other way while Newark doesn’t repay its outstanding loan and dole out another $30 million without supervision, the financial mess will worsen for the next Governor. Unless he or she has made a special deal with Newark to continue the favoritism, the end to slashing everyone else’s municipal aid while shoveling money at Newark will come to an end.”
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