13 Jan ESSEX COUNTY EXECUTIVE DIVINCENZO PRESENTS BALANCED AND RESPONSIBLE BUDGET PROPOSAL FOR 2022 Executive Presents County Budget with Zero Percent Property Tax Increase
Published on January 13, 2022
Budget is presented before Statutory January 15th Deadline for the 19th Consecutive Year
Newark, NJ – On Thursday, January 13th, Essex County Executive Joseph N. DiVincenzo, Jr. presented a balanced and responsible 2022 budget of $839 million that includes a zero percent property increase and addresses the challenges due to the ongoing national economic conditions. This is the first time the Executive has presented a budget with a zero percent tax increase and has stabilized tax increases, limiting them to just 0.37 percent over the last three years. Layoffs have been avoided since 2004 and budgets have been unveiled before the State’s statutory deadline of January 15th for 19 consecutive years.
“In addition to the physical health effects of the coronavirus pandemic, there were negative impacts to our local economy and our residents’ financial health. Presenting a 2022 budget with a zero percent tax increase while preserving services is recognition of the financial hardships experienced by our residents during these difficult times,” DiVincenzo said. “Developing our annual budget is a serious matter and sets the financial plan that the county will follow for the upcoming year. Presenting it by January 15th enables us to identify the complex challenges facing government and address them early. It also gives our municipal partners and constituents a clear snapshot of what to expect from the county,” he added.
“We have worked aggressively over the last 19 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 – earning a Aaa bond rating, presenting this year’s budget that does not increase property taxes and refinancing debt without extending its maturity dates. These would not have been possible if we did not remain vigilant about keeping our financial house in order,” the County Executive said.
“Essex County is a microcosm of what the state is. Under the leadership of the County Executive, this government stands for everyone and improves the quality of life for everyone,” NJ Senate Majority Leader and Deputy Chief of Staff Teresa Ruiz said.
“Joe, you are a testament to good government. People can look at Essex and see what you are doing. It gives residents places that we are proud to call home,” NJ State Assemblywoman Eliana Pintor Marin said.
“This is just a great job as always. Nineteen years with the budget being presented before January 15th. We come to expect this every year and you don’t let us down. This is truly a partnership, and we appreciate that,” Commissioner President Wayne Richardson said.
“In the face of the pandemic and its adversity, the county continues to rebound. But I believe we are past rebounding; we have been leading the way in this state for some time. Essex County has demonstrated over a two-decade period how to be a model government,” Commissioner Vice President Carlos Pomares.
Other Commissioners in attendance were Romaine Graham, Tyshammie Cooper and Len Luciano.
The County Executive pointed out that his administration monitors the budget throughout the year and started preparing the 2022 budget in June 2021. 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:
- The 2022 budget includes a zero percent property tax increase. The State cap allows governmental operating budgets to increase property taxes up to 2.0 percent annually.
- Over the last five years, property tax increases have been limited to a miniscule 0.45 percent and over the last 10 years, Essex County has held the increase in property taxes to about 1.16 percent, which is significantly below the state cap of 2.0 percent.
- Over the last 20 years, Essex County has held the increase in property taxes to about 2.04 percent, which is the fourth lowest percentage rate of increase of all New Jersey counties behind Hunterdon, Monmouth and Burlington counties.
- 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 2022, the debt service payment is $127.8 million, which will be reduced to just $54.4 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 more than 4,000 employees in 2003 to 3,562 in the 2022 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 2022 is about $85.9 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 2022 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 2022 budget is projected to have about $111.4 million of new, recurring revenue, which lessens the County’s reliance on raising property taxes.
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 16 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 2022 budget proposal has been forwarded to the Essex County Board of County Commissioners for review.