12 Jan ESSEX COUNTY EXECUTIVE DIVINCENZO PRESENTS BALANCED AND RESPONSIBLE BUDGET PROPOSAL FOR 2021
Published on January 12, 2021
Executive Presents County Budget before Statutory January 15th Deadline for the 18th Consecutive Year
Newark, NJ – On Tuesday, January 12th, Essex County Executive Joseph N. DiVincenzo, Jr. presented a balanced and responsible 2021 budget of $770 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 18 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.
“On behalf of the Board of Commissioners, we will continue to work with the County Executive. It is an achievement to present the budget so early in January for the 18th consecutive year,” said Board of Commissioners President Wayne Richardson, who was accompanied by Vice President Carlos Pomares.
“We have worked aggressively over the last 18 years to address long-standing issues affecting Essex County and strengthen our finances. These past few years, we have seen the fruits of our labor – getting a Aaa bond rating, helping Newark accelerate the replacement of its lead water service lines and partnering with our municipalities and public school districts to purchase equipment. These would not have been possible if we did not remain vigilant about keeping our financial house in order,” the County Executive said.
The County Executive pointed out that his administration monitors the budget throughout the year and started preparing the 2021 budget in June 2020. 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.
This constant attention to detail in preparing the budget has enabled Essex County to do the following:
- In August 2018, Essex County earned a Aaa bond rating with a Stable Outlook from Moody’s Investors Services, the first time in history that Essex attained the highest rating available. To put this in perspective, when DiVincenzo entered office, the County’s bond rating was just above junk bond status. Having a strong bond rating demonstrates the fiscal health of a government and helps save money because lower interest rates generally are offered.
- Starting in 2007, DiVincenzo implemented a “debt diet” 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 2021, the debt service payment is $127.2 million, which will be reduced to just $47.2 million in 2028.
- DiVincenzo has downsized the County workforce by not filling open positions 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 19 years, Essex County’s workforce has been reduced from a high of almost 4,000 employees in 2003 to 3,542 in the 2021 budget proposal.
- Over the years, Essex County has built a strong fund balance by realizing savings in previous years’ budgets. The fund balance projected for 2021 is about $71.9 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.)
- $36 million in fund balance is being used as revenue in the 2021 budget.
- Under DiVincenzo’s direction, the county continually looks for new opportunities for recurring revenue, which includes shared service agreements with other governments and government agencies and new fees. The 2021 budget is projected to have about $104.2 million of new, recurring revenue, which lessens the County’s reliance on raising property taxes.
- The 2021 budget includes just a 0.5 percent property tax increase, well below the 2.0 percent cap limit mandated by the state and the second consecutive year the increase was held to 0.5 percent.
- Over the last 10 years, Essex County has held the increase in property taxes to about 1.28 percent, which is under the state cap of 2.0 percent.
- Over the last 19 years, Essex County has held the increase in property taxes to about 2.19 percent, which is the fifth lowest percentage rate of increase of all New Jersey counties behind Hunterdon, Monmouth, Burlington and Somerset counties.
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 2021 budget proposal has been forwarded to the Essex County Board of County Commissioners for review.
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