ELIZABETHTOWN - If you thought the state's budget outlook was bad, a glance at Essex County's upcoming 2011 budget process is sure to garner a cringe as a 30 percent tax hike could be looming.
County officials stressed this week that everything that can potentially be cut is on the table, including employee pay freezes, a sales tax hike and privatizing the county-owned Horace Nye Nursing Home.
According to Essex County Manager Dan Palmer, the county is likely to fall $7 million short in 2011. In recent years, supervisors have dipped into the county's fund balance to make up the difference and buy down the tax levy.
But that fund is now depleted. Palmer says using any more than $3 million from the county's reserves could threaten its credit rating.
"We had hoped the sales tax figures would have come in better than they did in 2009," Palmer said.
Although only in the second year of a four-year deal with the Civil Service Employees Union, a contractual clause that requires the reopening of negotiations if and when national health care is passed will bring the parties to the table on April 19.
"We need a pay freeze, across the board," Palmer said.
Stripping Essex County's 400 employees of their already guaranteed four percent increase would save $1.3 million.
County officials are predicting health insurance costs alone will skyrocket 20 to 25 percent.
Supervisors are also considering a one-quarter percent increase in sales tax, which could generate about $2 million in revenue.
Essex County Board of Supervisors Vice Chairman Roby Politi has renewed his calls for the privatization of Horace Nye, a potentially sticky proposition in the county's eastern half.
"We have to address the immediate solutions," Politi said. "I know no one wants to talk about wage freezes or Horace Nye, but these are things that we are elected to address."