Impoverished Camden looks to fire, police for cuts

CAMDEN, New Jersey Wed Nov 17, 2010 10:30am EST

CAMDEN, New Jersey (Reuters) - Caught between the national economic downturn and a sharp decline in state aid, one of America's poorest cities has cut spending so much it is targeting public safety to balance the budget.

Camden Mayor Dana Redd has asked police and fire departments to share the pain already felt by the rest of the city's 1,255 employees, who have taken a 20 percent pay cut over the last six months to help close a $28 million budget deficit.

Local media reports have said more than a third of the city's public-sector jobs could be eliminated in a city where unemployment is already running at 18 percent, nearly twice the national average, and more than half the population lives below the poverty line.

The city, once home to the recording company RCA and a thriving shipbuilding industry, lost manufacturing jobs during the last century but is still home to Campbell Soup Co (CPB.N), a major employer.

"There is still an opportunity to come to the table," Redd told city employees at a meeting on Tuesday. "We need everyone to share in the sacrifice in order to minimize the number of layoffs."

Many U.S. cities are making deep spending cuts to offset falling revenues in a sluggish economy, according to the National League of Cities. An October survey found 79 percent have laid off workers this year, 69 percent have canceled or delayed capital projects, and 34 percent have modified employee health benefits.

In Camden, the city's proposed budget for fiscal 2011 has been cut 24 percent to $138.8 million. Property taxes have risen 3 percent. All non-essential spending has been frozen.

The city has also submitted a layoff plan to a state body that must approve any reductions in public employees, and is due to announce its decision by the first week of December.

At the Tuesday meeting with about 100 city employees to update workers on the job-cut plan, Redd said she was looking for concessions in areas such as salaries and health benefits, especially from police and fire departments, that might allow the number of layoffs to be reduced.

Redd declined to specify how many jobs might be lost while the layoff plan is being evaluated by state officials. Local media have reported some 500 jobs, or more than a third of the work force, are at risk.

Any layoffs will worsen economic conditions in a city where 52 percent of the 79,000 population lives below the federal poverty line, the median income of $24,283 is less than half of the state average, and the overall crime rate is three times higher than the national norm.

City Council President Frank Moran asked workers to help save money to avert layoffs.

"Camden has always been that unique city that has always needed that extra push," Moran said at the Tuesday meeting.

He criticized New Jersey's Republican governor, Chris Christie, whose cuts in municipal aid have made it much harder for struggling cities like Camden to maintain services.

"If you believe that he is going to go the extra mile for us, then you are not living in the real world," Moran said.

In closing a record $11 billion state budget deficit, Christie cut funding for distressed cities to $250 million from $750 million and increased the number of applicants for that funding to about 25 from nine, Redd said.

Michael Aguilar, 62, a building maintenance worker for the City of Camden for the last 10 years, said six months of one-day-a-week furloughs had forced him to withdraw about $4,000 from his savings account to meet living expenses.

Aguilar said he came to the meeting in the hope of finding out whether he will keep his job, and wanted to know why the city's police and firefighters had not also been furloughed.

"I would be one more on the unemployment line," he said, asking what he would do if laid off.

(Reporting by Jon Hurdle, editing by Daniel Trotta and Peter Bohan)

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