2025 Budget Message

presented January 21, 2025

Good afternoon Commissioners and guests. And a warm welcome to our newest Commissioner-at-Large, Michael Ruffu, and the board’s new legislative counsel, Ken Warren.

I join you today to present the 2025 Executive Budget Message. This message will provide a summary of the state of Atlantic County and the current projections for our 2025 county budget. The actual budget will not be introduced until after the Governor’s annual budget message. By law, the Governor must deliver his budget message to the State Legislature on or before the fourth Tuesday in February.

New Jersey residents continue to debate the benefits and costs of offshore wind. Atlantic Shores, which plans to build 195 wind turbine generators 10-20 miles off the coast of Atlantic County, is forging ahead. Atlantic Shores has already spent millions of dollars on the purchase of properties for a cable staging area in Atlantic City and offshore substations in Egg Harbor Township. Transmission cables will run underground from the Chelsea section of Atlantic City to Egg Harbor Township.

My position has always been for the offshore wind developers to identify the costs; the savings to our taxpayers; definitive proof the turbines will not harm our marine life, fishing and tourism industries; the infrastructure impacts of transmission lines; as well as an explanation as to why no other proposed projects are as close to shore as the ones planned off our coast.

We are also awaiting yet another decision in our casino PILOT lawsuit that challenged the state’s 2021 casino PILOT amendment. The amendment negated the 2018 court-ordered consent agreement.

Three Superior Court judges ruled in our favor that the consent agreement was binding. Each time a decision was made, the state appealed. Last October, the state Appellate Division vacated the prior decisions, not because it disagreed with the rulings, but rather because it questioned the “process” that relied on certified legal affidavits instead of sworn testimony. Mind you, no one from the state had ever raised this concern in any prior proceeding. Furthermore, 99% of all cases accept certified legal affidavits.

If all taxpayers in New Jersey benefit from the casinos, why are the taxpayers of Atlantic County the only ones to bear the burden of the PILOT legislation?  We are the second poorest county in the state behind only Cumberland County. Atlantic County taxpayers are owed approximately $14.1 million. And that is what we expect to receive. The original PILOT will sunset in 2026. But don’t be fooled in thinking that will be the end. 

Taxpayers would stand to benefit from something I’ve been requesting for decades, countywide tax assessment, with values being maintained on an annual basis. I would like to revisit this idea for Atlantic County in 2025 with the full cooperation and support of the Board of Commissioners. As hard as we work to reduce county taxes, our efforts and the cost savings to taxpayers is often offset by assessed values not keeping up with market values due to fluctuations in the real estate market as we saw during the pandemic.

Last year we reduced county taxes by 5-cents per $100 of assessed value, but many taxpayers failed to realize that savings because their tax bill reflected an increase based upon an inflated property value on their county tax bill. 

Margate, for example, is only slightly above 50% assessed value. That means a $1 million municipally-assessed home is taxed like it’s a $2 million property on the county tax roll, i.e. $1 million is 50% of $2 million. The farther below 100% valuation, the higher the value of the property for county tax purposes. The county has no say in these state and municipal formulas and functions. It is imperative that all towns be at or close to 100% so county taxes are based on true property values. Countywide tax assessment could ensure consistent property tax administration and valuation. It’s long overdue and the excuses are wearing thin. If you are not inclined to pursue this let me know.

We have a similar situation with the Central Municipal Court of Atlantic County. Ten towns are currently members, leaving 13 that are not. With the 2025 proposed court budget, those 10 member towns will enjoy a savings of $1.2 million or 45% compared to what they were paying prior to joining the consolidated court. It’s difficult to understand how non-member towns can argue against joining the Central Municipal Court if they are truly interested in reducing costs and saving money for their residents.

We welcome a conversation with any town that is interested. Atlantic County is once again leading the way with the first court of its kind that has also been successful in reducing recidivism among its defendants. The individuals who come before our judges are referred to social service supports to address issues such as domestic violence, substance abuse and mental illness. In this way, there are secondary savings for our taxpayers. Individuals can be treated for problems before they escalate and reach Superior Court. These interventions are saving lives and saving costs.

I am pleased to report our proposal to transition our Meadowview Nursing facility to a Veterans Home has been well received. Meadowview has been operating at a deficit since the COVID-pandemic. Like other long-term care facilities, it is difficult to attract and maintain staff. Atlantic County is one of only three remaining county-run nursing homes in the state. When I became county executive, there were 21 such facilities. Staffing shortages and empty beds equate to a decrease in revenues which we can no longer absorb. 

Also of interest, our discussions with the Diocese of Camden continue for construction of a senior housing complex adjacent to Meadowview and close to several important county services for older residents.

We are also progressing with the construction of the second building at the National Aerospace Research and Technology Park. The building will include space for the Aerospace Innovation Center, one of five state strategic innovation centers, to provide research space and connectivity to the Federal Aviation Administration’s advanced aerospace data systems and labs.

During the past year, the NARTP welcomed three new tenants to building one. Applied Research Associates, Inc.; Quecon, Inc.; and Signature Science joined existing tenants General Dynamics, the National Institute of Aerospace, Woolpert, the FAA and NASA.

We continue to work with Industrial Realty Group, LLC., one of the largest industrial real estate developers in the country, to promote the development of 400 acres at the Atlantic City International Airport for use as an air cargo hub and aircraft maintenance and repair facility. This will provide yet another opportunity to expand our economic development impact with hundreds of short-term construction jobs and many more long-term jobs.

I met with local developer Leo Schoffer who is moving forward with his plans to construct a four-story, 111-room hotel adjacent to the NARTP with multiple restaurants, a 24,000 square foot convention center and two additional hotels in later phases. 

We are working with partners and establishing relationships across the state and the nation. The hard work is paying off. Last July, we welcomed BETA Technologies to the Atlantic City International Airport for a demonstration of its all-electric aircraft with zero-emissions capabilities. The company could have gone anywhere but chose to come here to share its potential to revolutionize sustainable aviation.

We are building a new industry, creating new jobs, attracting new business and diversifying our economy. It was just nine years ago that we introduced our economic development plan.  We have made great strides and enjoyed extraordinary success. Despite the skeptics and naysayers, we have established the foundation on which to build a better Atlantic County.

Our foundation remains financially secure as confirmed by Standard and Poor’s and Moody’s Investors with our consistent top tier credit ratings and 25th consecutive perfect audit. Our conservative fiscal policies have served us well, but we are continually challenged by rising costs and increasing demands for services.

One example is the cost of participation in the State Health Benefits Program. In 2023, local governments were hit with an unexpected and unprecedented 24% increase in premium costs and in 2024 we were dealt an additional 7% increase. These increases not only impact our employees, who must make larger cost-share contributions, but also our taxpayers.

For the past two years we have been working tirelessly to find a better option. The plan we developed in 2023, based on a model previously accepted by the state, was then rejected at the eleventh hour after months of discussions. 

We are exploring several other options. We have presented a plan that is currently being vetted by union management. If all unions find it acceptable, we will proceed. Otherwise, we will continue to look at alternatives that can provide the same, if not better, benefits at a cost savings to all.

Another impact to our budget is the end of the American Rescue Plan as of December 31, 2024. As you will recall, the federal government developed the plan in response to the COVID pandemic. Funding was made available for a broad spectrum of services. 

Atlantic County was able to fund several projects including HVAC replacements in the County Office Building, Civil Courthouse, and the county jail, and completion of HVAC projects at Meadowview and the Historic Criminal Courthouse. We were also able to provide matching funds for the state Library Construction Bond to replace HVAC systems in several county libraries. Additionally, the ARP funding helped us accomplish a number of drainage projects and fund a $7 million cap to the ACUA landfill to help mitigate odors.

Some of the existing construction projects will make use of ARP funding through December 31, 2026, however, no ARP funds can be budgeted in 2025 or beyond. As a result, there will be a loss of $3.8 million in ARP funds to replace lost revenue. With a high degree of inflation and limited economic growth, replacement revenue for 2025 is difficult to generate. The general revenues start at $54,607,148.04.

Salary and wage are up 3% at this point. To help contain costs, we have decided to freeze all vacancies for half a year. The hiring process continues to be a challenge, particularly in the healthcare field, as a direct consequence of the COVID pandemic. We are recommending the use of $800,000 from salary and wage for the hiring of contract nurses at Meadowview. 

Other expenses have generated a 6.63% increase. The county jail, for example, has proposed increases of $1.6 million in social and medical services, inmate supplies, food and more. The cost for extraditions has increased by $96,000. Before COVID, transports occurred by car with some prisoners being housed overnight in local jails during longer trips. Such overnight stays are no longer permitted. Since COVID, many transports now occur by plane at a significantly higher cost. 

Additional expenses include the Department of Planning’s update of the Solid Waste Plan at a cost of $100,000. The Superintendent of Elections has requested an increase of $300,000 for coding and tabulations of election results. A new security contract for Public Safety will increase by $182,000.

Despite these increases and the loss of ARP funding, we believe we can still find a few more cuts that should help us reduce the county general purpose tax yet again this year. We expect to introduce our 2025 county budget on March 4 with the library and public health taxes remaining level and a decrease in the general tax rate. 

We plan to use $19,317,757.00 of surplus this year, or approximately 50%.

With the information available at this time, the county tax levy would be $188,677,483.86 and the general purpose tax rate would be reduced by 1 to 1.8 cents. The final numbers will be determined after all municipal values are submitted to the Atlantic County Board of Taxation.

The preparation of our annual budget is an extraordinary team effort that requires extensive time and attention by fiscal staff throughout county government and in cooperation with your own budget subcommittee. The direction of those efforts starts at the top with County Administrator Jerry Del Rosso, County Treasurer Bonnie Lindaw, Administrative Services Department Head Tammi Robbins and Budget Manager Julie Sharkey. We are fortunate to have the service of these knowledgeable and dedicated individuals.

We have much to look forward to in the coming year. As long as we remember who we serve and continue to do what is best for our residents, I am confident we can meet any challenge and continue to be recognized as the best run county in the state.

Thank you and God bless you all.