11 Jan ESSEX COUNTY EXECUTIVE DIVINCENZO PRESENTS BALANCED AND RESPONSIBLE BUDGET PROPOSAL FOR 2016 Executive Presents County Budget before Statutory January 15th Deadline for the 13th Consecutive Year
Newark, NJ – On Monday, January 11th, Essex County Executive Joseph N. DiVincenzo, Jr. presented a balanced and responsible 2016 budget of $762 million that stabilizes the County’s financial plan and addresses the challenges due to the ongoing national economic conditions. Layoffs have been avoided since 2004 and budgets have been unveiled before the State’s statutory deadline of January 15th for 13 consecutive years.
“Every year we are faced with a variety of challenges that affect our County. By starting our planning process early and presenting our budget by the January 15th statutory deadline, we are to create a strong groundwork and sound financial plan for our Department and Division Directors and Constitutional Officers to follow throughout the year,” DiVincenzo said. “Presenting our budget by January 15th is important because it gives our municipal partners and constituents a clear snapshot of what to expect from the county,” he noted. The County Executive added that it is his goal to have Essex County’s bond rating elevated to a AAA rating. Its current bond rating is AA2, which is the highest it’s been in a generation.
The County Executive pointed out that his administration started preparing the 2016 budget in September 2015. Getting an early start enabled Department and Division Directors, Constitutional Officers and County agencies to identify and address issues, investigate ways to reduce expenses and generate new revenue, and have a plan in place by the statutory January 15th deadline. “This rigorous planning and constant vigilance has helped us to respond proactively when we are faced with challenges brought on by the national economy, unexpected events or new laws,” DiVincenzo said.
The 2016 budget proposal maintains the County Executive’s initiative to stabilize the county budget and strengthen the county’s finances. Some highlights include the following:
- $835,000 is being deposited into the County’s “snow bank,” a dedicated fund that can be used in case the snow removal budget of $3.5 million is completely spent. Having the snow bank eliminates the need for emergency appropriations or budget transfers. With this year’s allocation, the snow bank’s dedicated funds will increase to $2.9 million.
- $19,000 is being allocated to a new Mosquito Control Reserve and it is anticipated as much as another $100,000 could be deposited by the end of 2016. Similar to the snow bank, the Mosquito Control Reserve will eliminate the need for emergency appropriations or budget transfers should additional resources be needed to control the mosquito population.
- $12.0 million in fund balance is being used as revenue in the 2016 budget. In addition, because of savings in the previous budget, the total fund balance will be about $64.4 million. This reserve helps respond to emergencies and displays fiscal stability to bond rating agencies.
- Over the last four years, Essex County has held the increase in property taxes to about 1.9 percent, which is under the state cap of 2.0 percent.
- Several Essex County facilities continue to generate recurring revenue through shared service agreements with other government agencies. The Essex County Correctional Facility is anticipated to generate $41.25 million in revenue by housing federal inmates, immigration detainees and inmates from Gloucester County; the Essex County Hospital Center is anticipated to generate $14.6 million in revenue through reimbursements from the State for admitting patients from the State, Passaic County and Middlesex County; the Juvenile Detention Facility is anticipated to generate $3.3 million by accepting juvenile detainees from Passaic County.
- The Essex County Parks Department is anticipated to generate about $13.9 million in revenue from admissions and user fees.
- Total pension costs amount to $37.6 million.
- Total health insurance and prescription costs have increased to $99.0 million, an increase of $13.0 million.
- The Fund Balance is anticipated to be increased to $64.4 million. This has helped improve the County’s cash flow and avoid taking out Tax Anticipation Notes for the last three years. (When DiVincenzo took office in 2003, the previous administration left a budget deficit of $64 million.)
In addition, open positions have been unfilled, unless they are essential to public safety and public health operations. This includes positions such as nurses at the Hospital Center or Corrections Officers at the Correctional Facility. Under DiVincenzo’s leadership, over the last 12 years, Essex County’s workforce has been reduced from a high of almost 4,000 employees in 2003 to 3,524 in the 2016 budget proposal.
The DiVincenzo administration has worked hard since 2003 to eliminate the structural budget deficit and ensure that Essex does not spend more than the revenue it collects. Austere budgeting, downsizing the workforce, eliminating unnecessary contracts and conservative spending practices have strengthened Essex County’s financial position, raised its bond rating and restored the County’s fiscal health. Essex’s bond rating has improved six times and is now an AA2 rating.
The 2016 budget proposal has been forwarded to the Essex County Board of Chosen Freeholders for review.