TRENTON, N.J. - Mercer County Executive Brian M. Hughes announced today the county is facing a $43 million shortfall in the next two years, and as a result, Hughes will push back his annual budget address to March 12 in order to explore and impose various measures to reduce costs.
The County Executive typically delivers his budget address before the Board of Chosen Freeholders in February of each year. But the dramatic increases in costs to the County over the next two budget cycles - caused by mandated increases in the pension system and rises in healthcare and prescription drug plan premiums covered under collective bargaining agreements - have forced a new direction on cutting costs, Hughes said.
"The county must reduce spending, even after tapping a significant portion of the county's surplus fund," said Hughes. "As is the case nationwide, our ratable growth has decreased and our expenditures have increased. Simply put, our labor contract obligations, pension obligations and state-mandated costs surpass our revenue year after year, and without drastic cuts, we cannot continue to meet those obligations."
Hughes said he anticipates Mercer County will receive stimulus aid but that any stimulus dollars granted to the county will go toward increasing opportunities. "Regardless of additional funding, Mercer County has to deal with the same economic crisis as every city, county and state in the nation," he stressed, "and we will make the best use of every dollar we receive."
Last year's budget was $278.4 million. Salaries and benefits of Mercer County's roughly 1,900 employees make up approximately 70 percent of the overall budget, and 80 percent of the county's revenue is generated through real estate by way of tax ratables, and subsequent real estate fees collected by the Office of the County Clerk, both of which have been significantly reduced during this economic downturn.
Hughes said his administration is considering every option available to cut costs, including implementing a pay freeze, instituting a hiring freeze on non-essential positions, leaving unfilled positions vacant, asking for voluntary furloughs and calling for concessions on labor contracts.
The administration has already held meetings with several of the various labor unions that represent County employees in order to urge their cooperation and, if necessary, agree to concessions that will aid in the goal of cutting costs, Hughes said.
Hughes added he anticipates the cooperation of the County's affiliated agencies such as the Mercer County Improvement Authority, the Mercer County Park Commission, and others in implementing hiring and pay freezes.
Among the most important functions of County government, and one of the few mandates, is the delivery of judicial and corrections services, and Hughes said he is committed to the construction of the new, $80 million Mercer County Criminal Courthouse. Other than those functions, there are few other services that County government is mandated to provide, and Hughes said he will review non-mandated offices and services to determine which are too costly to continue to maintain. Hughes reiterated that every cost-saving option is on the table and no department, program, employee or service would be immune to possible reorganization.
"Mercer County residents have come to expect a high level of service, and I want to continue to meet their needs, but some programs and amenities may have to be cut," he said.
"We continue to avoid non-essential purchases, limit overtime, reorganize operations and deliver services as efficiently as possible, but it may be necessary to increase fees for some of our recreation programs and eliminate other programs.
"It is imperative that we make these painful cuts today; if we don't, the long-term ramifications will be significant. Although I am optimistic America's financial house will one day return to order, I must lay the groundwork today for the greater fiscal challenges we face into 2010 and beyond."