Gloucester: The county that’s cutting taxes — and freezing spending

Frank DiMarco, the director of the Gloucester County board of commissioners, was thrilled to give residents a tax rate cut in April.

He wasn’t happy with what happened next: Inflation … and a rise in prices, seemingly of everything, especially gas.

So, DiMarco did what he felt was the fiscally responsible thing to do: He put a freeze on all county spending.

On Wednesday night, DiMarco said the county is freezing spending over the next three years.

“Residents tell us their concerns, and it’s up to us as commissioners to address them. We do not have the luxury to just say, ‘We cannot do anything else,’” he said. “As government officials, we’re committing to actually following through for our residents by taking it a step further and freeze spending.”

The county’s 2022 total budgeted expenses were $236,052,235 — a total DiMarco intends to maintain. He said it is the only logical move in the quickly changing climate.

“After decreasing the tax rate and passing our annual budget, the world changed the game on us — inflation and rising gas prices,” he said. “This was not what was anticipated, but I felt it necessary to act quickly and offer more relief for our residents.”

DiMarco said the county cannot control gas prices or rising inflation, but it can control its spending.

“We are not seeing relief from the federal government, so Gloucester County is going to have to do the work for them,” he said.

DiMarco and the county are acting quickly — but they also are following a steady stream of moves they have been making since 2008, when they started a series of proactive measures.

Here’s what the county says it has done:

  • Eliminated 463 positions ($31.9 million in savings) since 2008;
  • Consolidated and merged departments, which has reduced the size of management by at least 40 positions;
  • Created an internal shared services network between sister county agencies (savings of more than $2.7 million);
  • Became the first county in the state to close its county correctional facility, regionalizing correctional services (a savings of more than $223 million since 2013);
  • Aggressively pursued all state and federal grant opportunities, which minimizes the need for county taxpayer-funded capital projects (a 60% increase in grant funding);
  • Invested in county infrastructure during the past decade, when interest rates were at an all-time low (less than 2%), completing all major projects.

More is coming. The county has cut the tax rate in each of the last two years, officials said. And, by freezing spending, county officials said they expect to be able to do it again next year.

The efforts are being noticed.

Gloucester’s bond rating improved during the pandemic. This May, Moody’s gave an Aa1 rating (its second-highest rating) to the county’s general obligation bonds. (The state celebrated earlier this year when its rating was upgraded for the first time since 2005, to A2, four levels lower.)

Moody’s, which said Gloucester’s outlook was “stable,” offered the following:

“The Aa1 reflects the county’s strong reserves that are projected to continue to grow in the near-term through ongoing modest tax increases and active management control of spending,” it wrote. “The county’s fiscal 2021 unaudited results are showing an increase in reserves nominally. Fiscal 2022 operations are already trending well to budget, indicating that fund balance should increases again by the end of the year.

“The rating also reflects the county’s sizable tax base, above-average resident wealth and income levels, and strong institutional framework it operates in. Finally, the rating incorporates a slightly elevated debt profile that consists of guaranteed debt and average pension liability.”