Good evening Commissioners,
I stand before you, five months into my first term, to present you with our recommended 2024 budget. We have always talked about how budgets should reflect our values. Despite some of the significant challenges that we continue to face, we have done everything possible to ensure that this first budget reflects our administration’s core beliefs and creates positive momentum for all of us as a county government in the year ahead.
Unfortunately, some of our priorities have been severely constrained this year because of actions that the previous administration chose to take, or, in some cases, not take. This year’s budget of approximately $425 million is primarily focused on correcting the serious financial mistakes of the past.
When I gave up a safe Assembly seat to run for this job, I had many folks ask me if I needed my head examined. They wondered why I would want the job, given Mercer County’s recent financial struggles including the abrupt departure of key personnel. I told people that I was running exactly because of the challenges our county faced, and that we needed bold new leadership that would be willing to do the hard work to get our county back on track.
The 4.5 million dollars in fines and interest that the State Comptroller’s office revealed last year, is just the tip of the iceberg. When it comes to the Hughes administration’s poor financial management, there was a whole lot more just beneath the surface.
From the moment I took office, our Chief Financial Officer (CFO) Nick Trasente and his team began working day and night to sort through disorganized financial records and an outdated computer system that were left for our Administration. And what we found under piles of paper, and through hours of converting outdated files, was over 10 million dollars in deferred charges that must now be paid for in the 2024 budget.
In 2022 and 2023, Mercer County under-budgeted department salaries and operating expenses to the tune of 6.4 million dollars. On top of that, the prior administration’s 2023 budget revenue projections were deliberately overestimated by 2.1 million dollars. AND, when you add in another 1.8 million dollars in over-expenditures from capital and grant accounts, you get a staggering 10.3 million dollars in deferred charges that we have inherited, and which must now be paid for in the current year budget.
To add insult to injury, the previous administration also somehow failed to budget for close to 1 million dollars in unfunded county debt that was due to be paid in 2022, meaning that this sizable debt must be paid for in our 2024 budget.
As the Commissioners are aware, the last five months have been challenging on a multitude of levels. Shortly after taking office, we were informed that our 2022 Annual Financial Statement had to be redone due to errors in the filing sent to the state. We also had rating agencies knocking on our door requesting that we complete the 2022 Audit. This audit, of course, should have been completed long before 2024, but was so far behind schedule due to the previous administration’s inability, or unwillingness, to cooperate with the auditors. Thanks to the work of our new CFO and his staff, we were able to successfully resubmit an accurate Annual Financial Statement, and finally complete the ‘22 Audit. And the great news here is that, despite the challenges I’ve outlined tonight, we were able to maintain our bond rating – not because we’re hiding from our problems but because the financial institutions and ratings agencies see that we are proactively addressing our budgetary problems and that we are committed to the “financial fundamentals” that will allow Mercer to remain strong for years to come.
The severe constraints we face because of the Hughes Administration’s fiscal neglect are coming at an already difficult time. As funding from the American Rescue Plan Act (ARPA) runs out, state and local governments around the country and here in New Jersey are tightening their belts. The previous administration relied heavily on these ARPA dollars, propping up their budget with 12 million in federal funds in 2023, which allowed them to paper over their fiscal mismanagement. This year our 2024 budget only utilizes 2.5 million in ARPA funds.
In addition to deferred charges and revenue constraints, our county is seeing costs rise in other areas as well. For one, debt service increased by 31 percent to a total of 47 million dollars, up from 35 million in the previous year. Between both Inmate Medical Services and the Youth Detention Center contract, there are another 4 million dollars in increased expenses this year. And finally, our Special Services School District’s county contribution went up 1.7 million dollars from roughly 3.2 million to 5 million. The county faces other increases, but these increases represent the majority of our cost drivers for 2024.
So, what does all of this mean for this year’s budget? Unfortunately, it means that the county is forced to raise taxes. Under this budget, the tax rate will go up by 1.3 cents for every 100 dollars of assessed property value. That’s an increase of about 42 dollars annually for the average Mercer County household. I don’t take any tax increase lightly. However, this modest tax increase is the only way to avoid drastic and unacceptable cuts to the essential services that our county residents rely on and deserve. If we include the full collection of the open space tax, we have still kept this year’s increase to less than 2 cents of the county’s equalized tax rate. Given what we started with, and what we’ve had to contend with, that is something to be proud of.
It is important to note that our ability to address our current challenges is also hampered by the statutory levy cap enacted by Governor Christie. The levy cap constrains our ability to raise more revenue, and it does not make any sort of adjustment for cost drivers outside of our control, like increasing healthcare contribution costs or even for standard inflation. Combined with the dwindling availability of ARPA dollars, the County will be forced to utilize an additional 10 million dollars from its rainy day fund that were supposed to be reserved for emergency circumstances.
I want to be clear that this budget does require some serious sacrifices. Our budget accepts that, for this year, we will need to leave many of our staff positions unfilled. This includes important positions in the Office of Information and Technology, Division of Public Health, the Office of Emergency Management, and at our Prosecutor’s Office. Moreover, some of our public employee unions have been working without a contract for several years, and as we work to negotiate fair contracts for all our employees, we will be limited by budgetary constraints.
Despite these difficult decisions, this budget isn’t all bad news. Our budget reflects many of the priorities we outlined in our transition report, and this budget makes down payments on many of the innovative ideas that came from our transition team. This budget codifies the organizational changes we have made, which will foster greater collaboration between departments, and leaves the county government better prepared to meet future challenges.
We created a Department of Public Health & Safety, led by Deputy Administrator Ana Montero, which brings together our office of Public Health with public safety departments such as the Office of Emergency Management, our Emergency Communications Center, and our Fire Academy. This allows our administration to set public health policy based on trends we are seeing on the front lines of public safety, knowing well that well-run public safety institutions can also help improve public health outcomes.
We also created a unified Community Services Department, under the leadership of Deputy Administrator Taraun Tice McKnight. This new department brings together our robust Human Services Department with our Divisions of Housing, Veterans Affairs, the Mercer County Office of Training Services (also known as One-Stop), and our Mercer County Connection. This concentrated most of our county’s public-facing departments under one single administrator, enabling us to enhance the consistency and efficiency across these departments and to better serve our community.
Lastly, we elevated key divisions including the Trenton-Mercer Airport, Corrections Center, Information Technology, and Library System to report directly to our County Administrator, Christopher Marion.
From this reorganization, our leadership will be able to better analyze and prioritize resources to maximize innovation.
And we have also been hard at work advancing several new initiatives that I believe make vital investments in our county.
We have bolstered our procurement office, expanding its staff and enhancing our capability to do more fair-and-open contracts, while laying the foundation to implement our much-needed minority set-aside bids. We are confident that opening up our contracting process will both increase transparency and result in a cost-savings through competition. And by prioritizing minority-owned, women-owned, and veteran-owned contractors here in Mercer County, we’ll ensure that taxpayer dollars are flowing back into our communities.
Another important initiative advanced in this budget is to establish an Office of Travel and Tourism. Our nation’s 250th anniversary is right around the corner. New Jersey was the crossroads of the American Revolution, and some of the iconic moments of our nation’s early history happened right here. The state is committed to establishing a Welcome Center in Trenton, and Mercer County must also realize the potential provided by this moment. The 250th anniversary is just the beginning, though. With our parks, our open space, our history, our educational campuses, and our downtown business districts, Mercer County is well positioned as a future tourist destination. Our Office of Travel and Tourism can coordinate across municipalities and market Mercer County as a great place to spend a weekend, eat great food, and enjoy quality time with family. Bringing in more visitors means more money flowing into our small businesses, a more robust economy, and more revenue for county and municipal governments.
At the Corrections Center, our administration recently released an RFP, and will be selecting an engineering firm to do a comprehensive facilities assessment. From our findings, we can proceed with the next steps of improving conditions at the Corrections Center.
In the area of IT, we are pursuing an audit of our current systems and capabilities. This audit will allow us to determine our next steps in modernizing Mercer County to meet the ever-changing technological landscape.
And at the Airport, we will be engaging a financial advisor who specializes in airport capital projects, so that we can get a real proforma and create an actual funding plan to build and complete our Trenton Mercer Terminal Replacement Project.
Another top priority, which you will see reflected in this budget, is establishing an Office of LGBTQIA+ Services. This office will provide a single point of contact who can assist the LGBTQIA+ community with their specific needs and connect them with key services provided here at Mercer County. The office coordinator will also interface with other departments to make sure the LGBTQIA+ perspectives are holistically considered in all the work we do.
All of these are important investments that we are advancing now, and we believe they will yield significant benefits for county government and for our residents. I’d like to be pushing forward with even more ideas and doing it more quickly. But as I said when I began, this budget is a challenge.
This is not the budget address that any newly elected County Executive wants to make. But I stand by what I told people who warned me when I was running for this role: Mercer County is worth the challenge.
Budgets reflect values. And as you can see in this budget, we value transparency, accountability and responsibility. It’s time to stop playing games with taxpayer money. I still believe that county government can do big transformative things. And I don’t see basic fiscal responsibility as a barrier to doing those things – it’s how we place ourselves on a sound financial footing that empowers us to be ambitious.
This budget also reflects our values in the things we are choosing to protect. We are not going to give up our nutrition services for older residents, or our services to veterans, or our work to help residents suffering from addiction. We’re not going to step back from our commitment to keeping our residents safe and healthy. I believe these services meet a moral obligation to serve our residents as they navigate difficult times, and maintaining these services will always be my priority.
Despite the challenges we face, I remain genuinely optimistic. We face a difficult year or two, but we will emerge stronger and with valuable lessons learned. We will make the investments we need in our infrastructure, our economy, and our people. Mercer County’s best days are ahead of us, and together we will make this a county government with leadership that works for everyone, and that we can all be proud of.