As Essex County’s 2017 tentative budget comes into focus, officials expect a tax increase of at least 5 percent.
ELIZABETHTOWN — Essex County is making progress on hashing out next year’s tentative spending plan.
Taxes will almost certainly increase next year.
“We’re in the 5 percent neighborhood,” Essex County Manager Dan Palmer told lawmakers on Monday.
But the increase is expected. Essex County is now in the fourth year of a five-year plan implemented to course correct their finances, which were teetering on insolvency after years of reliance on their fund balance.
Lawmakers have been holding budget workshops for much of this month.
One giant question mark is the annual renewal process of employee health insurance policies.
Palmer estimated a 10 percent increase in premiums, but hopes that can be whittled down to 7 or 8 percent depending on how discussions with four different providers play out.
“So we will have four quotes to look at to see where we are in terms of that,” Palmer told lawmakers on Monday.
Health insurance “experience ratings” are complicated, Palmer said, and rates and premium renewals are driven by shifts in the Affordable Care Act and state tax surcharges, among other variables.
“Health insurance gets to be really complicated when you go to the experience rate,” Palmer said. “But hopefully, we’re looking at that 7 to 8 percent range.”
Additional details will be available next week after the county’s purchasing manager returns from vacation.
“We have to file by (November) 15th, which we fully intend to do,” Palmer said.
The county is right where it needs to be following the five-year plan, Palmer said, and the county’s reserves have returned to a “more acceptable level.”
“We’ve managed to go from nearly a $7 million deficit to a healthy fund balance. How we choose to use that moving forward makes a big difference,” Palmer said.
“Hopefully next year, we’ll be at 2 (percent),” Palmer said of the projected tax increase.
The state tax cap doesn’t make planning easy for municipalities, he said.
“The 2 percent is never 2 percent,” he said. “This year, it’s .6 percent.”
Essex County’s 2016 spending plan clocked in at $96.5 million, with a 6 percent increase in the tax levy.