TRENTON, N.J.—Mercer County Executive Brian M. Hughes outlined his administration’s proposed 2009 budget Thursday night and said potential layoffs as well as other cost-saving measures are in order to help close a $43 million budget shortfall in the next two years.
Hughes delivered his annual budget address before the Board of Chosen Freeholders and an audience of County officials and employees in the County’s McDade Administration Building. He said the possibility of laying off workers in the coming months will be one of the most difficult decisions of his career as County Executive, but that it could be necessary to keep Mercer County’s finances intact.
“The men and women who work with us are a big reason why we have such an outstanding quality of life in our county. For this reason, it is with great regret that we consider these layoffs,” Hughes said. “We have soldiered through the economic difficulties valiantly, but it is clear that we in Mercer County are not immune to the damage.”
The proposed $296,516,924 million budget is approximately $3.7 million larger than the 2008 budget and the anticipated County tax rate is 45 cents per $100 of assessed property value, 2 cents more than the 2008 rate. The 2009 tax levy will be $219,013,335 as compared to $208,483,580 in 2008, representing an increase in the levy by approximately $10.5 million. Hughes said the County will utilize $13.6 million in surplus funds — which represents about half the total surplus — in order to lessen the burden on taxpayers.
Hughes said his administration worked to build up the County’s surplus fund from $11 million in 2004 to approximately $26 million today and that the County’s bond rating has been upgraded twice in recent years. Those factors have shored up the County’s financial standing but have not been enough to counteract the recession and growing costs, he said.
The $20 million budget gap this year and the anticipated budget gap of $23 million next year are largely the result of labor contract obligations outpacing growth, soaring County pension obligations, and state-mandated costs surpassing revenue year after year, Hughes said.
In addition, the County’s ratable growth has decreased to just 1.48 percent, down from the typical 11 percent to 13 percent growth in the County in 2005, 2006 and 2007. Ratable growth is expected to decline again in 2010.
With 70 percent of revenue allocated for salaries, wages, and benefits for the County’s 1,900 employees, Hughes said layoffs must be considered. The County first warned layoffs might be possible on March 5. It is also exploring instituting other measures to cut costs, including a hiring freeze, a pay freeze for existing workers, furloughs, rolling back some health benefits and concessions on existing labor contracts.
Some programs and services might see reduced funding as well as a way to lower the budget. However, the County Executive emphasized that programs serving Mercer’s neediest populations such as young children, the elderly, and the homeless will not be affected.
Hughes also noted Mercer is expected to receive an additional $3.1 million in federal stimulus funding for various community and infrastructure projects, which could help spur the County’s economy by creating jobs locally.
“Because of the hard work and sound policies we have practiced, Mercer County is not facing the same sort of cataclysm as in other places around the nation. But we know that this is not the end, nor is it the beginning of the end. This will be a long term process with years of difficult decisions ahead, but I am confident,” Hughes said.