It all started with a housing bubble and some questionable investment products on Wall Street. Then Lehman Brothers and Bear Stearns collapsed, taking a good portion of the economy with it. In response came the Troubled Asset Relief Program and a new President and Governor.
Three years into the Great Recession, things have improved, but not by much. Unemployment still hovers around double digits. Estimates on underemployment are near 20 percent. In the midst of this, New Jersey struggles with its own economic crisis. Some aspects of New Jersey’s money woes predate the Great Recession, and some are a direct result of it.
Governor Chris Christie took office in January promising to restore “fiscal sanity.” Governor Christie has cut the budget in numerous areas, and by all indications, he is not nearly finished.
Perhaps most troubling to local government are the cuts in state aid to local governments and schools. Governor Christie’s budget includes $275 million in cuts to local
governments and almost $1 billion in cuts to schools.
Faced with all these factors, municipalities in New Jersey have tried every conceivable method to save money and balance their budgets. Local government officials have been forced to make painful choices, often involving layoffs, service cuts, or both. However, many municipalities have been trying new methods of saving money that have helped lessen layoffs and service cuts, or even in some cases avoid them altogether. The League of Municipalities recently sent out a survey asking towns about the innovative and effective ways they have cut costs over the past few years.
Some municipalities did little things that add up in the end. Towns indicated that they switched from premium to regular gasoline for all public vehicles. Other towns may have changed to single stream recycling, where all recyclable materials are picked up at once, instead of sending different trucks on different days for different items. Still others were able to hold the line on salary increases, or share office space between different municipal departments, or cut the work week of town employees from five days to four during the summer months. Even the leaf collection system can be a source of savings; one town indicated they switched from a curbside to a homeowner bagged collection system, and were able to save $400,000.
Shared Services Based on the responses we received, the most popular solution by far was shared services. Towns shared almost everything possible, including municipal courts, purchasing, animal control, emergency dispatch services, and information technology. Most towns will look to their neighboring municipalities to create a shared services agreement. Some towns, such as Monroe Township in Gloucester County, will consolidate services such as police dispatch and tax collection with the county.
Woolwich Township entered into a shared services agreement with the Borough of Swedesboro, where Woolwich provides police services for both towns. According to Woolwich Administrator Jane DiBella, “This venture has been beneficial to both municipalities as the borough has been able to save money and the township receives costs from the borough which assists towards the operational costs of our own department.” Woolwich and Swedesboro also share fire department, park and recreation, and code enforcement services. Jim Debbie, the Administrator of Mountainside, lists eight different areas where his borough shares services, saying that sharing is “old hat” in Mountainside. Oakland jointly bid garbage disposal with two other towns, saving them over 16 percent, or $200,000, over the past two and a half years.
Attrition Perhaps the next most common method to saving costs is attrition. By not replacing employees that have retired or voluntarily left, a municipality can reduce its costs without having to layoff any employees. Many towns that responded to the survey indicated that they have not replaced any employees in some time. They have been “doing more with less,” still keeping up the essential town services with fewer employees working harder. For example, according to City Manager Stephen Lo Iancono, Hackensack has eliminated 17 positions through attrition, saving the city over $1.7 million. Plainsboro has eliminated ten positions, with many other municipalities close to these numbers. Along these same lines, several towns indicated they were able to save costs through attrition not by keeping the position vacant, but by hiring a part-time employee to replace a full-time one. This saves money not only in salary but also in benefit and pension costs.
Green Savings Perhaps surprising to many is the extent to which municipalities attempted to “go green” to save not only money but also the environment. The League, through our participation in the Sustainable Jersey program, has also promoted environmentally friendly policies as a way to save money as well as the planet. Even before the Great Recession, Highland Park touted the thousands of dollars saved through green initiatives. It seems as though many towns have realized the economic savings that may result from green policies in the past few years.
Several municipalities indicated an increasing focus on recycling. For example, Mayor David Runfeldt of the Borough of Lincoln Park implemented an aggressive campaign to encourage recycling. His municipality has saved over $200,000 just in landfill tipping fees. Recycling also provides a way for towns to make money. Towns indicated that they saw a significant increase in their recycling reimbursement fees from recycling centers after encouraging residents, business, and public employees to recycle.
Recently, Senate President Steve Sweeney stated that the Senate would soon become paperless, saving taxpayers millions of dollars. On a smaller scale, the City of North Wildwood implemented several paper saving policies. Sending out agendas for council meetings electronically have saved over $4,300 in the past two years. Using online access to state statutes and codebooks instead of buying the print versions has saved North Wildwood over $2,200 in the past year.
Many towns that have achieved
Sustainable Jersey certification have installed energy efficient light bulbs and solar panels throughout their public buildings. Manchester Township modified the furnace at the township garage to run on used motor and diesel oil, saving money on heating oil while getting a second use out of the oil for their vehicles.
The volume and variety of innovative cost saving measures implemented by municipalities is not just a product of necessity; it is an indication of how hard local elected officials are willing to work to protect their employees while still providing taxpayers essential services at a reasonable cost. Tough times are likely to continue, but even so, citizens can remain confident that local officials will continue to work in their best interests. The League sincerely thanks all municipalities that participated in this survey.
This article appeared in New Jersey Municipalities, Volume 87, Number 6, June 2010