DiVincenzo presents $769.9M budget for 2020

Photo Courtesy of Glen Frieson
Essex County Executive Joseph DiVincenzo Jr., third from left, presents a 2020 budget of $769.9 million. With the county executive are, from left, Freeholders Carlos Pomares, Vice President Wayne Richardson, President Brendan Gill, Tyshammie Cooper, Patricia Sebold and Robert Mercado.

ESSEX COUNTY, NJ — Essex County Executive Joseph DiVincenzo Jr. presented a 2020 budget of $769.9 million on Jan. 10. According to the county, this budget 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 Jan. 15 for 17 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 Jan. 15 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.

“We have worked aggressively over the last 18 years to address long-standing issues affecting Essex County and strengthen our finances,” he continued. “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.”

According to DiVincenzo, his administration monitors the budget throughout the year and started preparing the 2020 budget in June 2019. 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 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.

Successes in the past two decades include: 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. 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 2019, the debt service payment was $124.6 million, which will be reduced to just $49.3 million in 2026.

Essex County has been able to utilize its Aaa rating to help municipalities and school districts obtain interest savings when borrowing for capital projects and equipment purchases. Essex partnered with Newark to loan $120 million to expedite the replacement of lead water service lines and, through its first-ever Pooled Government Loan Program, Essex bonded $11.9 million to help the municipalities of Irvington, Roseland and West Caldwell and the public school districts in Belleville, Cedar Grove and Livingston borrow money for equipment purchases at reduced interest rates.

DiVincenzo has downsized the county workforce by not filling open positions unless they are essential to public safety and public health operations. Over the last 18 years, Essex County’s workforce has been reduced from a high of almost 4,000 employees in 2003 to 3,544 in the 2020 budget proposal.

The fund balance projected for 2020 is about $76.8 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. $30 million in fund balance is being used as revenue in the 2020 budget. The fund balance also has been utilized to pay for capital projects, one example being the construction of the third parking deck at Turtle Back Zoo, which helps the county avoid borrowing money for capital improvements and paying interest.

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 2020 budget is projected to have about $98.8 million of new, recurring revenue, which lessens the county’s reliance on raising property taxes. The 2020 budget includes just a 0.5-percent property tax increase, well below the 2-percent cap limit mandated by the state and the second consecutive year the increase was held to 0.5-percent.

The 2020 budget proposal has been forwarded to the Essex County Board of Chosen Freeholders for review.

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