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Newark has submitted an application for $31 million in state aid to address its budget crisis. Pictured in this file photo, is Newark's City Hall.

(Aristide Economopoulos/The Star-Ledger)

NEWARK — Newark officials have submitted an application for $31 million in state aid, triggering state oversight of Newark's finances while the state considers the request for help.

The application, submitted Friday to the Division of Local Government Services paints a grim picture of the city's finances but offers broad measures the city plans to take to address its budget crisis.

City and state officials face an uphill battle to solve Newark's budgetary problems. In April, Newark officials disclosed the city would need more than $90 million to balance its 2014 budget.

Part of that budget gap is a $30.1 million deficit from 2013, which is required to be rolled into the 2014 budget year. The city faced an additional $63.4 million gap in 2014 bringing the total funds needed to balance the 2014 budget to about $93.5 million.

Newark Mayor Ras Baraka said Tuesday during a Star-Ledger editorial board meeting that he plans to work with the state to get the city on sound financial footing.

"People look at oversight as control. It's not really control, it's more monitoring," he said. "We are hoping for the opportunity to work together and not work under the state."

If the city did not not submit an application for transitional aid, money the state gives municipalities in fiscal emergencies, the city would have to lay off more than 400 employees or 14 percent of its workforce, according to its aid application.

"The city would have to cut the salaries of personnel in the Departments of administration, child and family well-being, Economic and Housing Development, engineering, Finance and Law to zero," the application read.

Newark said in its application that the city faced a deficit for a number of reasons including rising health care costs, declining payroll taxes and reduced one-time revenue sources.

The city also failed last year to hold an accelerated tax sale, in which the city sells the liens of delinquent taxes.

"It reflects an imminent failure to carry out the best management practices--a behavior that the city will correct in the coming year," the city wrote.

In its application, the city pledged to implement a hiring freeze, reassess its contracts and curb employee use of cars and cell phones. Baraka has also pledged not to reduce the city's police or fire forces.

But he said Tuesday the state will likely have some say in the city's hiring.

"The state is going to review some of the hiring," Baraka said. "If it makes sense they will allow us to hire, if it doesn't make sense to them then we'll have to prove to them that it does make sense."

Newark's municipal council introduced a budget on July 1 of almost $800 million. The proposed spending plan would increase taxes for the average homeowner to $5,333 from $5,082.

The city council last week approved Baraka's application to ask for state aid.

Soon after, State Sen. Kevin O'Toole (R-Essex) asked Senate President Steve Sweeney to convene a special meeting of the Senate Budget and Appropriations Committee to discuss Newark's finances.

Sweeney said he is considering the request.

Other cities have submitted applications or transitional aid including Atlantic City, Harrison and Asbury Park.

Baraka has said his goal is to generate more revenue for the city and wean the city off state aid in the future.

"We got to find that revenue," he said Tuesday.

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