Union County Freeholders Do Business As Usual During Financial Crisis

Just two weeks ago the Director of Finance for Union County was quoted in an October 1st Star Ledger article regarding the impact that the current Wall Street goings-on would and had been having on county government. Director Caroselli said, "Thankfully, we issued bonds in February when market conditions were stronger"; he went on to explain that if the county needed cash now; it would be "really biting its nails". Because, very simply bonds are actually loans made by investors that government sells to finance their spending habits and spending at a rate of over $1 Mil. every day Union County has a pretty big habit. And is anyone in a buying mode right now?

With the US financial markets in crisis and everyone, the lenders and investors included, keeping their change purses snapped tightly it sounded as though Union County would not be incurring any further debt. It sounded as though all of her financing was securely buttoned down for the foreseeable future. To county residents this must have sounded pretty good, after all we have the 9th highest property taxes in the nation.

Some of our towns pay more to the county than they keep to operate their municipalities.  Many of our county residents are employed by NYC financial concerns and are experiencing drops in or total loss of income and certainly don't want to have to worry about their property taxes increasing anytime soon.  The relief of being able to afford to stay living where they are was short lived however as within 24 hours, on October 2nd, two press releases appeared on the county website that could be viewed as a harbinger of times to come.

Fitch Cites "Strength of County's Broad and Diverse Economy" & "Conservative Budgeting" in Giving UC the Highest Attainable Financial Rating http://www.ucnj.org/news/0810financialrating.html    The county information office quotes from a press release put out by Fitch announcing that Union County has been given a AAA bond rating the highest attainable, Moody's followed with their AA1.  The Fitch release states that "the county's strong financial management is largely reflected in its ability to maintain adequate fund balance.... willingness to raise recurring revenues should continue to produce adequate reserve levels despite two years of modest revenue shortfalls".  This should come as no surprise to the residents as we all know from experience that the county has never had a problem when it comes to raising revenues, they simply raise taxes.

And, following immediately -  Freeholder Board to Approve $33.4M Bond Ordinance http://www.ucnj.org/news/0810bondordinance.html   outlining how in just 7 days the freeholders would vote to start spending money. Referring to the Fitch and Moody ratings "Union County's recent AAA and AA1 ratings are solid proof that the Freeholder Board has been, and will continue to be, strongly committed to the responsible management of public finances," said Freeholder Chairman Angel G. Estrada. One gets the feeling that like a teenager trying to justify blowing his first paycheck all on junk contrary to his parents wishes Estrada views the bond ratings as justification to put county residents further in debt with what could be considered some unnecessary purchases weather they want to buy now or not.

Though the Feds are pouring $700 Billion into Wall Street they still have not exactly said who will be getting what and when. The situation is critical and the Sunday morning television show experts warn that we do not have weeks but that immediate action needs to be taken for the financial markets to rebound with limited damage being done.  What ever does happen is expected to be felt on budgets at all levels of government according to officials consulted for the Ledger article with some already taking steps to soften the expected blow in 2009. Meanwhile as our UC Freeholders are approving the sale of $33.4 Million in bonds the market closed below 10,000 the lowest it has in years, NJ unemployment figures rose inching past healthy and the state is talking of giving assistance of some kind to those in danger of foreclosure.

Granted there are those who routinely live life on the edge and will invest and make scads of money during these perilous times but most will proceed with caution until the worst is surely over. Should Union County be concerned now as the Director of Finance suggested a few days before the freeholder vote on the bonds or should we carry out business as usual during the crisis?

We all know that "nail biting" is not a good habit and most certainly it is always better to carefully use the "clippers" to trim the excess and in the case of the UC Freeholder budget there is plenty of excess to clip with a full scale manicure long overdue.

Patricia Quattrocchi is a former Garwood Councilwoman and the Vice Chair of the Union County Republican Committee.