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Passaic County Passes Budget with No Tax Increase

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For the first time in 16 years, the Passaic County Board of Chosen Freeholders voted unanimously for a 2017 budget that did not increase taxes.

The adopted budget of $420.9 million reduces overall spending by $1 million, reduced the county’s debt service by $10 million, and does not negatively impact any county programs, all while keeping taxes flat and maintaining the county's AA bond rating. In addition, the budget has allocated an extra $1 million for county parks, and an extra $450,000 for county roads and bridges.

“This budget is an accumulation of hard work and good financial planning that has taken place over the last decade,” said Freeholder Director Sandi Lazzara. “Conservative budgeting practices have not only put the county in good financial standing today, it has also given us a better handle on whatever the future has in store.”

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Budgets are generally split into two categories, anticipated revenues and anticipated expenses. According to NJ state law, a governmental entity cannot anticipate more revenues than received in the previous year. For example, the sheriff’s office collected $2,547,798.57 in fines and fees for the year 2016, but the budget only anticipates $997,494 of revenue for 2017, less than half of the revenue collected in the previous year. Passaic County has been creating cushions in the budget to avoid potential spikes in future tax levies, such as in 2006 when the housing market crashed, reducing real estate fees collected from the County Clerk’s office from $9.7 million to $3.1 million.

Passaic County has also been paying off a “legacy debt.” In the mid-90s, the Freeholders built an incinerator which made no money, and accumulated a large amount of debt. As a result, the Freeholders must pay an obligation of $4.5 million on that debt until the year 2037.

The Freeholders also reduced the county’s workforce from 2,392 employees in 2006, to 1,850 employees to date.

“To appreciate where we are today, you have to know where we have been. Misuse of funds by former Freeholders, coupled with the devastating effects of the recession, put Passaic County in a financial hole. Today, the county is in better shape than it was before the recession,” said Freeholder Pat Lepore, who chairs the budget committee. “Our budgeting practices have resulted in the highest bond rating in county history, and has set Passaic County on the path of good fiscal health.”

In a day when government is trying to accomplish more with less money, Passaic County has turned to shared services agreements as a tool to reduce the tax burden on our citizens, while maintaining or enhancing services. Passaic partnered with Essex County in 2009 to create a shared service agreement, which opened up its  juvenile detention center to Passaic County youths. This shared service agreement is the largest in the state, and saves Passaic County $10 million a year.

Additionally, Passaic County had an average daily population of approximately 60 adjudicated youths before this agreement. Thanks to Essex County’s participation in the Juvenile Detention Alternative Initiative (JDIA), the average daily population of youths from both counties is less than 30.

Passaic County also has shared information technology services with Woodland Park, the City of Passaic, and the Wanaque school district; consolidated its Division of Consumer Affairs with Bergen County; medical examiner services with the State of New Jersey as well as Hudson, Somerset, and Essex Counties; Para-Transit Services with West Milford; vehicle fuel sharing with the Borough of Pompton Lakes, Pompton Lakes Municipal Utilities Authority (MUA) and Board of Education (BOE), and Prospect Park; as well as a cooperative purchasing of Gas and Electric with Hudson and Essex Counties, as well as all 16 municipalities in Passaic County.

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