Last week the Union County Freeholder Board approved two amendments to the budget, reducing the $494.4 million number to $493.7 and the amount to be raised by taxes, previously $321.7 million, to $317.5 million.
The cuts resulted in the tax levy increase dropping from $19.2 million to $15.2 million, according to Union County Department of Finance Director Bibi Taylor.
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, the county increase is just one part of taxpayers three-part tax bill, which also includes municipal and school tax for 2013.
Freeholder Daniel Sullivan, who chaired the Fiscal Committee, previously mentioned the county would be looking under every rock to find further reductions, and, he thought the end result showed due diligence.
“Throughout this process we have diligently worked with our administrators, directors and bargaining units to come up with a final budget proposal that realizes efficiencies aimed at reducing the tax levy while avoiding layoffs or cuts that would imperil the delivery of important services,” Sullivan said at the meeting.
The board will hold a public hearing as part of the regular meeting tonight at 7 p.m. on the amendments to the budget and overall spending plan for 2013. Residents will be able to address the board regarding the budget during this public hearing.
Tuesday Taylor explained how the county made the $4.2 million in cuts, stressing that while there were some major reductions, others were incremental.
“One of the major cuts was $1.8 million in health benefits, bringing the overall cost for expenditure down from $49.2 million to $47.4 million,” the finance director said.
Taylor said that initially the county thought health benefits would increase by 18 percent this year, but that the number actually came in at 10 percent.
Taylor explained that the reduction in this number came from the county’s 2,800 employees having an overall healthier “general well being,” rather than the impact of major illnesses, which increases health premiums. This decrease in doctor visits and major illnesses was aided through county-sponsored wellness prevention programs, the county said.
One of the other ways the county saved money, according to Department of Administrative Services Director Matt DiRado, was to provide a financial incentive for employees not requiring health benefits.
This “opt out” plan approved by the state allows municipalities and counties to offer employees using the family plan $5,000, and $1,800 to a single person, if they do not take health benefits.”
Taylor explained that 333 employees out of 2,800 decided to take the county up on this option. Although the county had to pay out $1.6 million to employees, they actually saved $4.7 million in health benefit costs after the $1.6 million was deducted.
The finance director said the county has to pay an average of $25,000 in health benefit premiums for a family, so the “opt out” is worth the initial payout overall.
Cranford also offers this incentive option, paying employees who do not need health benefits $7,000.
That still was not enough to make the budget reductions the freeholder board wanted to ensure taxpayers were not heavily impacted, Taylor said. She explained that while public entities are faced with statutory and contractual expenses, the focus was to go line-by-line in the budget to cut costs where possible.
“We went back to every department head, took a hard line and told them we would not be filling any vacancies for a period of 90 days,” the finance director said. This three-month freeze did not include any public safety or grant-funded positions.
“We did not make the time longer because our staffing levels have decreased and while employees can absorb thework of these former employees, it is not a long term solution in some cases,” Taylor added.
Taylor said other major cuts were made in the Sheriff’s Department, with $370,000 saved by not filling vacancies. This reduced the Sheriff’s budget from $16.5 million to $16.2.
Runnells Specialized Hospital was also able to see additional decreases of $350,000 through outsourcing of dietary and housekeeping departments.
The Department of Corrections slashed close to a half million dollars through the help of Luminosity, the firm hired to streamline this department.
“Because of the reduction in inmate population, we then saw a drop in medical, food and other costs in this department,” Taylor said.
In January when county manager Al Faella released his 2013 executive budget, he said the county was at the beginning of the second year in a “multi-year budgetary turnaround.”
Part of the problem was that the county needed to develop more revenue streams and put in place proactive measures that control costs in future budgets. Faella said that was not going to be easy to do because new revenue sources were nearly flat in 2012. In fact, the county saw a $9.2 million drop in revenue.
Faella blamed this on the reduction in state and federal reimbursements as well as increased state-mandated costs. This included a $5.8 million increase in contractual salary costs, health insurance, pensions and the $1 million unexpected expense of superstorm Sandy.
Nevertheless, Faella did note that Union County continues to maintain a strong fiscal profile, with one of the highest bond ratings attainable from the three major ratings agencies.
Overall, Faella said, the county managed to stem the tide of eroding revenue collections in line with the national economy recovery. However, the ongoing slump in New Jersey real estate values and the destructive impact of superstorm Sandy plagued the county as the ratable base again declined by 3.8 percent to $65.9 billion. As a result, tax appeals jumped 35 percent in the the past two years.
Despite this, county parks and the community development departments increased revenues by $250,000, along with the county clerk’s office which saw a $1.1 million increase.
While still down from record highs several years ago, it was a noteworthy jump according to Faella, who did not see a doom and gloom 2013.
“We maintain a high quality of life in Union County and remain one of the most desirable places to live and raise a family. This is because we continue to make public investments in our educational system, preserve open space, maintain and improve our parks system, our cultural institutions and our roads and bridges,” Faella noted, but admitted all this does not come cheap.
“Unfortunately quality does not come without cost,” the county manager stressed.