Essex County Executive Joseph DiVincenzo, Jr. presented a proposed budget of $713.7 million at a Friday press conference in Newark's Hall of Records that calls for no layoffs or furloughs but keeps the hiring freeze from last year in effect and contains a 2.4 percent tax increase -- amounting to about $57 for the average Essex household.

When the budget process began in September, the County was faced with a $63.9 million gap, driven largely by increases in health insurance, pension payments, salary and utility costs. Health benefits alone are expected to cost about $55 million in 2010, an increase of $8.1 million over last year, and DiVincenzo noted that had the County not changed health care providers, the increase would have been $13 million. He also observed that the County didn't opt into the state's pension deferral program because it didn't seem fiscally responsible.

To bridge the gap, requests by County departments and divisions were scaled back, and appropriations in insurance, deferred charges, salaries and other expenses and utilities were reduced by $21.6 million, according to a press release. About $15.1 million of anticipated revenue in local revenues, state aid and special items was received. The balance of the gap was filled by using $18.5 million in surplus and the 2.4 percent tax increase.

Two budget-saving initiatives the County Executive is continuing to pursue are freezing salaries for 2009 and 2010 and requiring all union-represented employees to pay a portion of their medical benefits and prescription drug costs. "Government can no longer afford to be paying for health benefits," he said.

Emphasizing some bright points, DiVincenzo pointed to new sources of revenue developed by various divisions, including $16.7 million generated by the Essex County Correctional Facility for housing federal inmates and immigration detainees.

DiVincenzo -- who recently announced his intention to seek re-election in November -- also noted that the County currently has a $54 million surplus, compared to a $63 million deficit when he entered office in 2003. However, he cautioned that while that number might lead employees in negotiation for a new contract to believe that there's plenty of money lying around, Moody's recommends having 5 to 8 percent of the budget in surplus, and the current figure constitutes just 4 percent.

"Our goal is to make this county a AAA bond rating," he said.

The 2010 budget proposal has been forwarded to the Essex County Board of Chosen Freeholders for review.