presented January 17, 2023
Good afternoon. I join you today to present the 2023 Executive Budget Message. The Budget Message provides an overview of where we are at this time with the information currently available to us. Please keep in mind this information may be subject to change, pending state action, prior to the introduction of our 2023 County Budget.
We begin a new year with concerns for the threat of a resurgence in COVID-19 cases. Atlantic County has lost more than 1,050 residents throughout the pandemic. We cannot thank our tireless healthcare workers enough for their heroic efforts to save lives and help prevent the spread of the virulent COVID-19 virus. The Atlantic County Division of Public Health continues to provide free COVID-19 vaccinations and boosters in addition to seasonal flu shots.
The COVID pandemic has resulted in significant losses in the local, regional and national labor pools. Businesses closed or reduced their workforces which left individuals unemployed, underemployed or seeking new vocations. During 2022 the Department of Family & Community Development and the Workforce Development Board implemented initiatives to encourage these individuals to take advantage of training and education programs. The Atlantic County Economic Alliance (ACEA) recently received funding for a new apprenticeship program for our veterans and earlier last year was awarded a $1 million statewide planning grant to promote recovery from the pandemic through aviation-related initiatives.
A request to reorganize the Federal Aviation Administration (FAA) and move its operations out of Atlantic County was defeated allowing us to retain more than 4,500 jobs at the FAA. The FAA, along with the Atlantic City International Airport and the National Aerospace Research and Technology Park (NARTP), are critical assets we are leveraging to attract new businesses and create high quality, sustainable jobs.
The NARTP’s first building is fully occupied with tenants that include the FAA, NASA, the National Institute of Aerospace, General Dynamics, Thunderbolt, and Woolpert Aviation, among others. Land is currently being cleared for the construction of a 40,000 square foot second building. Approximately $8 million has already been committed for design and construction with the potential for an additional $10 million in state funding.
A 2022 study by international firm Deloitte found New Jersey, led by the efforts of the ACEA and NARTP, to be economically viable for a new sector of aviation technology – known as Advanced Air Mobility, which is essentially the use of air taxis for passenger and cargo transportation.
According to the study, this industry could provide as many as 3,000+ direct jobs; nearly 5,000 indirect jobs (providing parts and services); 5,500 jobs in servicing a new workforce; and 12,000+ auxiliary jobs related to tourism, real estate, insurance, medical and legal professions. The Advanced Air Mobility sector is also projected to provide $152 million in state tax revenue over the next 15 years. We’re extremely excited about these expanding opportunities.
In 2023 we anticipate working to further advance an air cargo hub on 400 acres of land adjacent to the airport. The hub will include 1.5 million square feet of air cargo space and the development of a maintenance, repair and overhaul facility, resulting in hundreds of short-term construction jobs and as many as 1,500 long-term jobs.
We concur with the prediction of the Press of Atlantic City in its January 6, 2023 editorial. “Significant results seem likely this year from Atlantic County’s groundwork to grow the local aviation industry.”
We also look forward to more opportunities for shared services to reduce costs for our towns and taxpayers. In 2022 we assisted towns with the purchase of computer software to help manage their flood plain activities and gain flood insurance discounts for their residents for potential savings in excess of $200,000. Other agreements provided opportunities for towns to purchase new public works and public safety equipment and participate in a commodity resale program to acquire savings on fuel purchases.
The first consolidated court of its kind in the state, the Central Municipal Court of Atlantic County, opened last January and now includes 10 participating towns. We will continue to look at how this court may be able to provide savings for additional towns.
To make doing business with Atlantic County more efficient and cost-effective, the county launched a new paperless, online bidding program in August. The new system eliminates the costs for vendors and provides them with automated notifications of bid solicitations. We will also be undertaking a redesign of the county website in 2023 to enhance accessibility, security and promote greater citizen engagement.
The county approved the purchase of new voting machines and e-poll books to replace an aging system and further ensure the integrity of our elections. The new machines offer a full-faced ballot screen, a paper verified audit trail, and enhancements for the visually impaired.
County taxpayers continue to benefit from the reaffirmation of the county’s top tier credit ratings. During 2022 inflation rose to its highest in 40 years and federal interest rates increased seven times, but Atlantic County was able to secure lower rates for capital projects and improvements because of our outstanding credit ratings from Standard & Poor’s and Moody’s Investors – the same high ratings we have maintained for 14 years in addition to 23 consecutive perfect audits.
Renovations and improvements to Lake Lenape Park East were completed and include a new fishing pier, pickle ball courts, pavilion, and ADA accessibility. We also received $4.6 million in funding for the rehabilitation of Lake Lenape Dam and spillway reconstruction. Additionally, Lake Lenape Park West has been approved for a new, safer dock system at a policy committee and public hearing of the Pinelands Commission. The full Commission will undertake a final vote at the end of January.
Efforts to enhance public safety included the ongoing installation of accessible push button traffic signals in the downbeach communities as well as road and bridge improvements throughout the county.
In 2022 the county helped launch a Stigma Free campaign to promote the availability and use of mental health services. We also created an opioid committee of community partners to expand addiction treatment and prevention. Plans include substance abuse services for individuals who enter emergency rooms at AtlantiCare and Shore Medical Center as well as transportation by the Sheriff’s Office to drug treatment providers.
The county looks to participate in an Energy Savings Program in 2023. Several buildings are being considered for new heating/cooling systems and conversion to LED lighting. There is also an agreement to install solar panels and improved roofing systems at a number of county facilities.
A new facilities warehouse will store used furniture and electronic items for auction and provide additional space for records storage.
Our accomplishments give us good reason to be optimistic about Atlantic County. Our conservative, fiscal management and long-term planning continue to serve us well. I am extraordinarily proud of what we have been able to achieve while still maintaining quality programs and services, low taxes, low debt and a surplus for unanticipated circumstances.
But inevitably there are challenges, many of which are beyond our control. In preparing the 2023 budget document, we are faced with two such challenges – the steady rise in inflation and the reduction in our workforce. With as many as 300 vacancies in 2022 or 20% of our full-time positions unfilled, we have tried to attract new hires by increasing our starting salaries. Because of our reduced workforce, we have also had to utilize outside agencies to perform certain services. Neither of these alternatives is ideal or will serve as a panacea.
In 2022 Atlantic County considered a salary increase for our workforce of more than 2% due to the rising consumer price index. During labor negotiations, we agreed to higher salary increases in exchange for unions accepting the more affordable 2030 health plan. That move helps employees pay less for health benefits, which increases their take home pay. It also reduces the county’s overall health benefits cost center. With the costs from 2022 and the 2023 salary increases, the salary line item is projected to increase $3 million.
County governments are typically responsible for roads, bridges and their building structures. During the past year, prices for goods and services have escalated and the ability to obtain the materials necessary to complete work has been impacted by the supply chain delivery lag that has also contributed to higher overall project costs.
In the proposed 2023 budget there are several areas where cost increases exceed normal economic trends. One of the most pronounced is the 24% average increase in the cost of state health benefits for local government employees which we only learned of in September. After that, we were also notified that the Public Employee and Police and Firefighter pension payments would increase $1.5 million.
The state also made two changes in the law last year that have impacted the operations and costs at our jail. Adjustments to mental health services and salaries have increased the county’s medical contract by $3.4 million.
Every household is keenly aware of the dramatic rise in the costs of perishable and non-perishable foods. For county government, those costs have increased by $360,000 among our senior programs, nursing home and jail. Utilities, gasoline and traffic lights are up $800,000. The county’s security contract has increased $171,000 due to rising salaries and the inability to fill vacancies.
We are also without the benefit of an additional $4.7 million in casino PILOT tax payments for each of the past two years. The state continues to use legal delays to avoid complying with the court order that it must honor the 2018 Consent Order for Settlement that provides the county with 13.5% of casino tax payments rather than the reduced payments designated in the 2021 PILOT amendment. As you may recall, the PILOT amendment was allegedly needed to help the casino industry recover from the COVID-19 pandemic. But by all accounts, the casinos have bounced back to pre-pandemic levels or better, unlike so many other businesses across the state.
Three Superior Court decisions ruled in our favor last year, but the state is appealing those decisions. The governor and his representatives have refused to speak with us to come to a resolution. Unfortunately, the longer it takes to resolve, the more costly it becomes and the longer the non-casino taxpayers must wait for the money they were promised in a court of law.
Because we do not have control for so many of these costs, it leaves us with few options to offset them. In order to meet CAP requirements, the county has used $13,801,335.00 or 50% of available surplus.
With the information available to us at this time, The Atlantic County tax levy for 2023 is $171,347,726.86. The general-purpose tax is 43.5 cents and is down approximately 2 cents.
When we first began working on our 2023 budget, things looked less than promising. Collectively we wondered how we would be able to maintain our low tax rate. I give tremendous credit to our departmental fiscal managers and budget staffs as well as to County Administrator Jerry Del Rosso, Deputy County Administrator Diana Rutala, Treasurer Bonnie Lindaw, and Budget Manager Julie Sharkey, who lead these efforts.
Thanks also to the Board of Commissioners for its continued support. Challenging times require thinking outside the box and a willingness to consider educated risks. The risk we took in establishing the ACEA and developing the NARTP is now providing us with growing opportunities that will ensure a brighter future for the next generations. If we can leave Atlantic County better than we found it, we can all be proud of the work we have done. With your help, I am confident we will meet that goal and will remain the best run county in the State of New Jersey.