On Thursday, January 12th, Essex County Executive Joseph N. DiVincenzo, Jr. presented a balanced and responsible 2012 budget of $725.5 million that stabilizes the County’s financial plan and addresses the challenges due to the ongoing national economic conditions. DiVincenzo noted that the 2012 budget is less than one-half of 1 percent (0.43 percent) more than 2011’s budget of $722 million. This is the third consecutive year that employee layoffs or furloughs have been avoided and the ninth straight year that the budget has been unveiled before the State’s statutory deadline of January 15th.
“Despite the difficult challenges brought on by the national economic downturn that we continue to face and the 2 percent property tax levy cap adopted by the State, our 2012 budget proposal continues to provide the same level of service to our residents,” DiVincenzo said. “I am also pleased that for the third consecutive year we will avoid employee layoffs and furloughs. This is important because it is essential that we keep people working throughout these dire economic times,” he added. Presenting the budget early in the year gives Essex County an advantage because it sets specific guidelines for directors to follow.
The County Executive credited the hard work of his Department and Division Directors, Constitutional Officers and Essex County affiliated agencies to stabilize the County budget. “Our Directors and Officers understand the financial dilemma we are facing and they have worked proactively to streamline operations, downsize the workforce through attrition, cut expenditures and find new recurring sources of revenue. This has helped our financial position and address our continuing budget concerns,” he added. DiVincenzo pointed out that it is never too early to begin the budget process and he already held an emergency meeting on December 28, 2011, with County Directors, Constitutional Officers and affiliated agencies to discuss and prepare for the 2013 budget.
Since entering office in 2003, the County Executive has advocated for austere budget practices and encourages Directors, Constitutional Officers and affiliated agencies to look for budget savings throughout the year, which results in a budget surplus or Fund Balance. Despite the economic obstacles, the Fund Balance will be increased by $300,000 to $22.2 million in 2012.
Aggressively pursuing new sources of recurring revenue have helped Essex County cope with escalating costs and lost revenue. Several initiatives with positive results have been at the Essex County Correctional Facility, Essex County Hospital Center, Essex County Department of Parks and Essex County Youth Detention Facility. The Essex County Correctional Facility began housing immigration detainees and Federal prisoners in 2008 and raised $8.6 million that first year. Revenue from the partnership increased from $17 million in 2009 (the first full year of the program) to $30.3 million in 2011 and a projected $41.4 million in 2012. The Hospital Center has maximized its reimbursement from the State for admissions of patients from Essex County, the State, Passaic County and Middlesex County to generate about $41.7 million in revenue in 2012. The Juvenile Detention Center has entered into a shared services agreement with Passaic County to house juvenile detainees from Passaic. The partnership started in 2009 and is anticipated to generate about $4.4 million in revenue in 2012. The revitalization of Turtle Back Zoo and other recreation facilities operated by the Parks Department has resulted in dramatic revenue increases. In 2007, the Parks Department generated about $6.5 million in revenue from admission and user fees. This increased to $9.5 million in 2011 and is anticipated to reach about $10 million in 2012.
In addition, reductions have been made in the operating budget and 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 10 years, Essex County has the fourth lowest average percentage tax increase of the 21 counties in New Jersey. The 3.05 percent increase for Essex County is behind Hunterdon (1.02 percent), Somerset (2.51 percent) and Monmouth (2.81 percent).
Essex County continues to experience the effects of the economic downturn in several areas of its budget. Revenue from the Register’s Office that reached a high of $14.5 million in 2007 declined to $7.7 million in 2009 and $7.3 million in 2011, and is anticipated to drop again to $6.8 million in 2012. Interest on investments that was at $4.1 million in 2007 decreased to $287,754 in 2009 and $136,439 in 2011, and is anticipated to be even lower at $125,000 in 2012.
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 highest level in a generation. The County workforce has been streamlined through layoffs and attrition, reducing the number of employees from over 4,200 in 2003 (the year before DiVincenzo first took office) to a budgeted 3,495 positions in 2012.
The 2012 budget proposal has been forwarded to the Essex County Board of Chosen Freeholders for review.