County approves $504 million budget

UNION COUNTY — The Union County Freeholders adopted a $504.9 million budget for 2014 late last week, with a tax increase of 2.9 percent, the lowest increase in a decade.

The freeholders ended up slashing county Manager Al Faella’s proposed $507.3 million budget to $504.9 million or $2.4 million less.

However, the total final spending plan showed a $9.5 million increase over 2013. Last year the final budget number came to $493.7 million, which resulted in a 4.97 percent increase for taxpayers.

The annual budget will require $327 million to be raised by taxes or an average of $62 for the average property owner in the county, compared to 2013 when the amount was $317.5 million or a $95 increase for the average homeowner.

The amount to be raised by taxes is the amount the county must collect from property owners in order to sustain services and pay employees. However, county taxes are just one part of taxpayer’s three-part tax bill, which also includes municipal and school taxes. After all three of those numbers are added together, taxpayers will have an accurate picture of their 2014 tax bill.

According to Fiscal Chairman Mohamed Jalloh, the committee held a series of four departmental budget hearings in Elizabeth, Scotch Plains, Mountainside and Plainfield prior to introducing the proposed spending plan along with getting approval from the state to move ahead and adopt the 2014 budget.

The freeholder was optimistic about the 2014 spending plan and the efforts made to be proactive when it comes to county financial issues.

“Overall the county appears to have stemmed the tide of eroding revenue collections while taking long term steps to increase new revenue streams,” Jalloh said, adding that this was “the lowest in a decade.”

Faella noted in his proposed budget released in February that the reduction of state and federal reimbursements as well as increases in mandated costs or what the state requires counties and municipalities to do, remained a financial stumbling block for Union County.

Not mentioned by Jalloh was the impact of the cost to run Runnells Specialized Hospital this year, which remained unknown because the facility is in the process of being sold.

Last year, though, it cost more than $13.5 million to keep the hospital afloat, a total of $30 million in just two years. With the sale of the hospital in the works and the deal wrapped up by the end of the summer, it was expected that number would go down, but not significantly.

Jalloh said the county was able to reduce the tax levy by $3.6 million without any loss of jobs or impact on county services to taxpayers.

The freeholder also reported that because of fiscal management and administrative oversight, the county’s bond rating remained “one of the highest attainable at AA1.” He said this was confirmed by a recent Moody’s Investment Services report, the leading provider of credit ratings, research and risk analysis in bond ratings.

Jalloh said Moody’s report indicated the county’s debt burden would remain “manageable, given a currently modest direct debt burden,” and cited the county’s “conservative” fiscal practices and diverse tax base.

“We have been able to increase our surplus by 25 percent or $4 million more over the past year, a key indicator of our fiscal health, which the ratings agencies take note of,” Jalloh added, pointing out that the budget process is now “a year-round process that requires the fiscal committee and county manager to examine all avenues for efficiencies.”

Although it is true the county did not see the massive layoffs they did in 2012 when 260 employees were cut, many towns still saw an increase in taxes while only two, Kenilworth and Springfield, actually saw a decrease over last year.

Even though the county indicated the average county tax increase would be $62, that does not accurately represent individual towns. In fact, the actual average increase was highly dependent on the state equalization rate which sets the tax rates based on ratables and property values.

For example, Springfield saw a $43 decrease for the average homeowner. It will be paying a total of $405,745.76 less than last year.Kenilworth saw a $42 decrease, or $266,690 less than 2013.

However, although a municipality may see a drop in overall county taxes, homeowners do not always reap the reward. For instance, Cranford, in total, is paying $291,752.68 less in county taxes than last year, but the average taxpayer there will still see a $4 increase.

The same was true of Roselle with a $6 increase but a $38,552 drop in county taxes; Rahway at $8 or a $109,771.08 decline; Linden at $12, or $72,060 drop; and Roselle Park at $16, or a $7,459.46 decrease.
Westfield property owners saw the largest hike in county taxes at $254 with a $2.1 million increase over total taxes in 2013, while Summit also saw their county taxes increase by $141 for the average property owner, or a $647,169 hike. This was considerably less than last year when county taxes went up $2.6 million.

Berkeley Heights saw $134 increase, or a $411,878.52 jump, which also was less than last year when county taxes increased by $1.1 million and the average property owner saw a hike of $201.

The 2014 budget process, while difficult, did have some high points, such as a reduction in pension payments by $2.2 million and capital expenditures by $1.5 million.

However, the amount for debt services increased by $3 million because of capital improvements and bonding for projects such as construction of the state-mandated Family Courthouse in Elizabeth and other improvements at Union County College Cranford campus.