Gloucester County administrator presents FY2027 budget with $6.5M gap; board hears options including tax and fee changes

Gloucester County Administrator Carol Steel on March 9 presented the County'Administrator'proposed FY2027 budget, laying out a $96 million-plus request and projected FY2027 revenues near $89.5 million under an equalized real-estate tax rate. Using those assumptions, Steel said the county faces an operating gap of roughly $6.5 million.

Steel told the Board the presentation showed the full requests from departments and external agencies rather than a narrowed recommended budget. Major drivers include personnel costs (the administrator proposed a 2.8% cost-of-living adjustment), implementation of a 1% step increase to address tenure/compression, a sheriff's step plan for law-enforcement retention and a career-ladder adjustments, and a projected health-insurance cost increase that staff estimated could be as high as 30% for the county (schools projected 15%). Steel said nine new positions were initially requested but one part-time position was removed, leaving eight new positions in the full submission.

The superintendent's recommended school budget is about $2.9 million above current funding and includes a potential removal of up to 12 full-time school positions through attrition in the face of declining enrollment. Steel said the county and school transfer request will be finalized after the school board completes its process.

To close the gap staff identified options: use $750,000 from the facilities maintenance, repair and replacement (FMRR) reserve to address capital requests; pursue additional revenues such as joining a cigarette-tax authority (requires authorization and membership), implementing a boat fee or boat tax (wide variance in neighboring localities' practices and revenues), raising the meals tax (county rate is currently 4%, the statutory cap appears to be 6%), or selectively increasing departmental fees (building-permit revenue could grow under higher fee scenarios). Staff estimated a one-cent change to the real-estate rate and a range of fee increases could raise roughly $2 million under conservative assumptions but would not fully close the shortfall.

Maria Le presented the utilities budget and capital plan and recommended a proposed 13% rate increase for water and sewer customers to support enterprise fund operations and capital projects. Le said about 80% of water customers use roughly 5,000 gallons or less; under a 13% increase a representative customer's monthly bill would rise by approximately $7 per month for water and by a comparable absolute increase for combined water/sewer bills.

Steel and department staff noted other funding considerations: projected school-sales-tax fund balances that could be used to pay some capital work in cash rather than debt; a grant-funded school resource officer (SRO) program that may need local funding if state funding does not continue (staff estimated $315,728 to continue three SRO positions absent new grants); an opioid abatement fund for targeted prevention and treatment programs; and ambiguous health-insurance bids that will be clearer after proposals are evaluated.

Board members asked detailed technical questions: whether Gloucester can join a cigarette-tax authority, how health-insurance projections would affect employee take-home pay, whether sanitary-district boundaries could be refined with GIS to avoid unequal service coverage, and whether some large utility projects (including Main Street work) should be phased. Staff said county counsel and financial advisers would return with additional details and that Davenport will present bank and bond items at an upcoming work session to help the board choose financing approaches.

Staff committed to deliverables: the full Excel budget workbook, a school-transfer history worksheet, a budget appendix with line-item backup, and additional locality comparisons and revenue modeling. Upcoming dates include a March 17 joint meeting with the school board, a March 26 budget work session (Davenport to present financing options) and a March 30 public budget hearing.

Steel said the budget is difficult and the board will need to balance potential use of reserves, possible tax/fee changes, and cuts or alternative financing to meet policy targets for fund balance while funding essential services.