From Worst to First: Stabilizing the Budget and Earning a Aaa Bond Rating
Essex County Executive Joseph N. DiVincenzo, Jr. has transformed Essex County from a struggling financial agency into a Aaa rated government with a $120 million fund balance projected for 2022 and a zero percent tax increase.
Under DiVincenzo’s leadership, Essex County earned a Aaa bond rating from Moody’s Investors Services for the first time in history. The Aaa bond rating is the highest rating available and is evidence of having a strong and stable financial foundation. It demonstrates the confidence Wall Street has in Essex County’s ability to pay its debts and will result in the county receiving significantly better interest rates when taking out bonds.
Since 2011, Essex County has held the line on property tax increase to an average of just 1.16 percent, which is significantly lower than the 2 percent property tax increase cap allowed by the State. And over the last five years, the property tax increase has been held to a miniscule 0.45 percent. In fact, in 2022, DiVincenzo’s budget calls for a zero percent tax increase. The Executive has stabilized the budget by eliminating unnecessary contracts, cutting costs, identifying new recurring revenue sources and streamlining the workforce from a high of 4,200 in 2002 to about 3,500.
In 2007, DiVincenzo implemented an initiative to stabilize the County’s debt service by refinancing existing debt without extending its maturity date and limiting the amount of new debt to a maximum of $20 million annually. In 2021, the debt service owed was $127 million but, over the next four years, that payment will continue to be reduced and will be just $37.3 million in 2026.
Except for his first year in office, Essex County has introduced its budget by the January 15th state statutory deadline, which enables a framework to be in place at the beginning of the budget year.
When DiVincenzo took office in 2003, Essex County had a $64 million budget deficit and a bond rating that was one step above junk bond status. Essex County was being compared to Orange County, California, which previously had declared bankruptcy.