The way things are going my oldest son will be 60 years old before Union County pays off its current debt according to the county Director of Finance Lawrence Caroselli. This year the county will shell out $35.8 million in debt service payments, currently Union County has a debt of $348.5 million and it is growing.
In fact, the Board of Chosen Freeholders is in the process of passing more ordinances totaling another $33.5 million in bonds for the construction of the new Juvenile Detention Center and what is called the “County Prosecutor’s Office Project”, I’m not sure what that is all about.. There is also an additional $21.5 million in short term notes for “various public improvements and the acquisition of new additional or replacement equipment and machinery, new vehicles, additional furnishings” and on and on.
When government entities talk about debt service they are, in laymen’s terms, talking about loan payments, Freeholder Daniel Sullivan is quoted in a local newspaper saying that “debt service payments are similar to mortgage payments on a home.” The $35.8 million payment for this year includes interest as well as the principal payment and according to Sullivan “it is really just another line item” in the budget, imagine that, “Just another line item”, easy for him to say it is not his personal money.
The amount of debt a county can carry is regulated by state statutes and is up to 2 percent of the assessed value of all the property in the county over a three year period; Union County is currently at about 0.71 percent. But wait, there are some other projects coming up besides those already mentioned which will need financing as well, including another addition to the Union County Vocational and Technical School and the remaining phases of the Union County Arts Center project. Not to worry, according to county officials as we have plenty of what can be called “wiggle room," the wiggle room is what concerns me.
The annual debt service payment is already almost 10 percent of the county operating budget, payroll costs are currently around 30 percent and it is a given they will go up each year as will insurance costs and assuredly pension contributions. The Freeholder Board must be thinking: Thank heavens that the value of Union County real estate is climbing as well to provide an endless stream of tax dollars to draw upon.
Think about it, when they go out to bond for projects they are actually borrowing money which will have to be repaid down the road. The more the freeholders borrow, the more money they will need to find to repay the loans and there is really only one place to raise the funds, the taxpayers.
The surge in building projects in the last several years has to be drawing to a close soon as I cannot imagine what is left to build however this wiggle room seems to give them carte blanche to find something. Just as children theorize “if I have it I should spend it” because that five dollars is sure to burn a hole in their pocket, and besides there is more where that came from, the freeholders seem to believe “if we can then we will." But at this rate how long before the “wiggle room” is gone?