ESSEX COUNTY EXECUTIVE DIVINCENZO PRESENTS
BALANCED AND RESPONSIBLE BUDGET PROPOSAL FOR 2019
Executive Presents County Budget before Statutory January 15th Deadline
for the 16th Consecutive Year
Newark, NJ – On Friday, January 11th, Essex County Executive Joseph N. DiVincenzo, Jr. presented a balanced and responsible 2019 budget of $761.6 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 16 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 able 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 noted that because of his administration’s conservative budgeting practices and initiatives to identify recurring revenue, Moody’s Investors Services elevated Essex County’s bond rating to Aaa with a Stable Outlook, the highest rating available and the first time Essex has ever attained Aaa status.
The County Executive pointed out that his administration monitors the budget throughout the year and started preparing the 2018 budget in June 2018. 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 2019 budget proposal maintains the County Executive’s initiative to stabilize the county budget and strengthen the county’s finances. Some highlights include the following:
· 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 $42.7 million in revenue by housing federal inmates, immigration detainees and inmates from Gloucester County; the Essex County Hospital Center is anticipated to generate $18.2 million in revenue through reimbursements from the State for admitting patients from the State, Passaic County and Middlesex County; and the Juvenile Detention Facility is anticipated to generate $3 million by accepting juvenile detainees from Passaic County.
· The Essex County Parks Department is anticipated to generate about $14.2 million in revenue from admissions and user fees.
· $44.5 million in fund balance is being used as revenue in the 2019 budget. In addition, because of savings in the previous budget, the total fund balance is projected to be about $74.6 million. This reserve helps the County respond to emergencies, displays fiscal stability to bond rating agencies and has helped improve the County’s cash flow and avoid taking out Tax Anticipation Notes for the last five years. (When DiVincenzo took office in 2003, the previous administration left a budget deficit of $64 million.)
· Over the last seven years, Essex County has held the increase in property taxes to about 1.5 percent, which is under the state cap of 2.0 percent.
· Over the last 17 years, Essex County has held the increase in property taxes to about 2.38 percent, which is the fifth lowest percentage rate of increase of all New Jersey counties behind Hunterdon, Monmouth, Burlington and Somerset counties.
· In 2007, DiVincenzo implemented an initiative to stabilize the County’s debt service by refinancing existing debt without extending its maturity date and limiting the amount of new debt to a maximum of $20 million annually. In 2019, the debt service payment is $111.6 million, which will be reduced to just $37.3 million in 2026.
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 17 years, Essex County’s workforce has been reduced from a high of almost 4,000 employees in 2003 to 3,544 in the 2019 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 18 times and is now Aaa with a Stable Financial Outlook by Moody’s Investors Services. This is the first time in history that Essex County has earned a “triple A” rating, which is the highest rating available. (The County has a AA-plus rating with Fitch Ratings.)
The 2019 budget proposal has been forwarded to the Essex County Board of Chosen Freeholders for review.