In an attempt to avoid a tax increase, Hudson County Executive Tom DeGise met with Hudson County Freeholders, county department heads and others seeking to generate a 10 percent cut in spending.
DeGise warned county legislators and department directors that serious belt-tightening will be required during the 2009 budget process in a series of meetings held in his office on Feb. 11.
The county, which operates on a calendar year rather than a fiscal year schedule, will introduce its budget in the spring. The county executive, after reviewing revenue projections, believes that significant cuts will have to be made in what is expected to be a $400 million plus county budget for 2009.
“We’ve prided ourselves in producing sound, gimmick-free budgets and keeping county taxes stable over the last six years,” said DeGise. “We’ve seen our credit rating improve and our debt burden drop as a result. To stay on that path now, and to limit as much as possible the tax burden on residents during these difficult economic times, we must review every department, every division and every program and find savings.”
Meanwhile, the freeholder board asked county department heads to renegotiate some of the contracts up for renewal, even though in some cases the new contracts showed no increases from the previously awarded contract.
“In this economic climate, vendors should be charging us less,” said Freeholder Bill O’Dea.
The downturn in the economy has reflected positively in some of the recent bids, said County Engineer Bob Jasek, who noted that the county has received more bids for a variety of projects than at any time in the recent past, and most of these came well-under the county cost estimates.
Bids for work being proposed for Washington Park in Jersey City and Union City came in at about $2.3 million when the county estimated it would cost $2.9 million. While work proposed for Lincoln Park in Jersey City came in slightly above estimates, repairs on the Union City/Hoboken viaduct came in significantly below estimates. The county estimated the work at $2.5 million. The low bidder came in at $1.8 million
“We believe that careful, well thought out cutting carried out by our frontline managers will actually make more of a dent in expenses than calls from the top for automatic, across the board cuts.” – County Executive Tom DeGise
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DeGise, meanwhile, issued a letter to all directors requesting them to conduct thorough, top to bottom reviews with the goal of reducing up to 10 percent from their 2009 budget requests. Rather than call for across the board cuts, he asked directors to take a “surgical” approach rather than “wield a meat cleaver.”
“We believe that careful, well thought out cutting carried out by our frontline managers will actually make more of a dent in expenses than calls from the top for automatic, across the board cuts,” DeGise said. “That said, there are broader changes in hiring and benefit policies we can implement that should yield savings.”
Jim Kennelly, spokesperson for the county executive, said the moves are being done to avoid imposing a tax increase. He said revenues are down due to the economic downturn, and DeGise is pushing to take action to avoid raising taxes, which would add even more of a burden on to a public already saddled with job losses and mortgage problems.
“Overall revenues are down $8 million or $9 million,” Kennelly said. “The county executive does not want to raise taxes or sell off county assets. So it is clear that he has to make some structural changes.”
The county executive has met with Freeholder Chairperson Doreen DiDomenico and recently met with most of the members of the Board of Chosen Freeholders in small groups to engage them in the process and present the case for cost reductions.
DeGise laid out the following items for consideration:
Effective July 1, all non-union employees will contribute 1.5 percent toward the cost of their health benefits. For example, an employee making $60,000 with a family health coverage policy would contribute $900 annually from their pre-tax earnings. Applied to just this employee group, the county can anticipate savings close to $500,000 annually. This is the first time county employees will be contributing to the cost of healthcare benefits. The county will enter discussions with union officials to seek the same kind of contributions from unionized employees. When fully implemented for all employees, the county would save approximately $2.3 million annually through this contribution system.
A 3.6 percent wage increase planned for all non-union employees scheduled for July 1 has been reduced to 1.5 percent. This will result in a savings of nearly $1 million annually. All contractual negotiations with union employees going forward during this cycle will reflect a need to seriously limit any wage increases and the implementation of the 1.5 percent contribution to their health care benefits.
A voluntary furlough program will be offered to employees, allowing them to take unpaid leave with the approval of their supervisors without loss of seniority rights or benefits. The furloughs will be carefully monitored to ensure that they do not cause any corresponding increase in overtime that would negate the positive financial benefits to the county for granting it. Cost savings will vary depending on participation.
Effective immediately, the county will set as a goal a phased-in reduction in its workforce through attrition over two years with the goal of saving up to $5 million annually.
The previously mentioned program review by department directors will look to consolidate redundant titles, reassign employees to make better and more effective use of their skills, and seek any and all program savings possible.
DeGise said he will continue to call on the State Legislature to pass Gov. Jon Corzine’s proposed pension deferment legislation. If passed, Hudson County could defer as much as $4.3 million in new, state-required pension fund contributions. The Board of Freeholders adopted a resolution in November 2008 calling on the legislature to move forward on the bill, which is now stalled in the State Senate.
“We are ready and willing to listen to any good ideas that will help us reduce costs,” DeGise said. “The goal for all of us in county government should be to work constructively toward a budget plan that eases the burden on taxpayers as much as possible while still satisfying our core missions of public safety, care for the sick and economically disadvantaged and maintaining our courts, roads, parks and other public property.”
DeGise said he plans to visit with county workers in the next 60 days to discuss the changes in benefits and wages and the seriousness of the budget problem facing the county this year.
Al Sullivan may be reached at asullivan@hudsonreporter.com.