It is my pleasure to come before you to present the 2011 Atlantic County Budget. I will be brief and to the point. It is no secret that these are challenging times for governments. News reports are full of stories of government cutbacks and public employees being laid off, or forced to take unpaid furlough days, forgo salary increases and to contribute a greater share of the costs for their health benefits. These stories are a reflection of the times. We have not been immune from these trends in Atlantic County. Yet, we have been able to fare better than many other governments due to our management staff and conservative fiscal policies.
Compiling the 2011 Atlantic County budget was especially challenging. We are still dealing with the impact of the worst recession since the Great Depression. Our major industry has seen four straight years of declining revenues and unemployment currently stands at nearly 12%.
Of more direct concern, county revenues are down. As a result of the crash in the real estate market, since 2008 Atlantic County’s equalized valuation has decreased by 13.9% or $8.1 billion. Complicating matters further, the state has imposed a stringent 2% budget cap which limits the amount local governments can raise by taxation with few exceptions. One state required exception is the county share of pension costs, which increased nearly 20% in 2011, to $11 million.
An area where we have managed to hold down costs is with our debt service which remains flat. Our policy has been to self fund projects rather than bond finance whenever possible. As a result, we are only at 12.5% of our total debt capacity. This includes nearly $49 million in debt service for needed improvements and expansions at both the Atlantic County Institute of Technology and Atlantic Cape Community College. During good times these would have been considered worthwhile projects. In the current economic climate these vital projects provide critical training and educational opportunities that help our residents find and maintain gainful employment. Even with these new obligations our 2011 debt service cost is up only $215. Future generations will not be saddled by unconscionable debt.
We have been very successful in responding to these challenging times. The 2011 Atlantic County Budget is $190,739,294.23, an increase of $1.98 million, or 1.05%. Our amount to be raised by taxation is $149,777,167.12 which is under the state imposed budget cap by $1.5 million. Based on the best information currently available, the projected 2011 equalized tax rate is at approximately the same level as it was five years ago, 0.298 cents. Our Public Health tax remains pretty much at last year’s levels, up less than 1.2 hundredths of one cent, as does our County Library Tax, up less than 1.5 hundredths of a cent.
This budget also calls for a one percent increase in funding for our three schools – Atlantic Cape Community College, the Atlantic County Institute of Technology and the Atlantic County Special Services School.
I would like to commend many of our county employees who voluntarily took furlough days during the time before they became mandated. Their sacrifice has been greatly appreciated. Furlough days eliminated approximately $1.8 million in costs. Our 2011 budget does not call for any layoffs or furlough days to balance the budget. However, a caveat is necessary. We currently have fourteen outstanding union contracts that need to be negotiated in the coming year. Should the costs of these contracts exceed two percent, furloughs and/or layoffs may become necessary during the course of this year.
We ended the year with a healthy $15.5 million budget surplus. In accordance with our standard practice we allocated 50%, into our current year budget.
In conclusion, I would like to thank our budget and management staff, as well as the Freeholder Budget Task Force, for their hard work in compiling a budget that best serves the needs of our residents. As I have said in the past, good budgeting is more than looking for ways to cut costs. Above all, it is a plan for intelligent spending. We have an ambitious year ahead as you can see from the attached list of projects we have planned. With your cooperation and support, we can make 2011 a year that lays the foundation for a prosperous and sustainable future.
I look forward to working with you. Thank you.