Northampton County Executive John Brown speaks to media after his State of the County address at the Gates Center of Northampton Community College.

Northampton County Executive John Brown delivered his State of the County address on March 25, where he spoke of the need to grow the local economy, operate county government in a cost-effective way, and keep tax rates as low as possible without sacrificing core operations.

During his speech at the Gates Center of Northampton Community College, Brown outlined the challenges the county faces, particularly the fact that expenses continue to outpace revenues, and that the general fund is insufficient to support the county’s spending demands.

“I really believe I came in with a mandate for change,” Brown said of his 2013 election. “Change is inevitable. It’s going on around us all the time. The question is, will we embrace it?”

The annual State of the County address, Brown’s second since taking office, was hosted by the Lehigh Valley Economic Development Corporation (LVEDC).

Brown said the county incurs a roughly $3.8 million per year increase in personnel costs, including about $1.5 million for health care, nearly $1 million for pensions, and about $1.5 million from the Gracedale Nursing Home. But tax revenue to cover those costs comes in at less than $1 million annually.

“These costs increase at about three times the rate of the tax revenue,” he said.

Beyond that, the county also faces at least $49.5 million in possible major expenses over the next five years. They include an estimated $15 million in Gracedale capital improvements, $7 million in swaption costs, $14.5 million for the possible purchase of a county department of human services building, and $9.4 million to for a “Cadillac tax” if the county cannot comply with terms of the Affordable Care Act.

That does not include other possible expenses and ongoing maintenance costs for repairs at county bridges, parking decks and the courthouse, as well as upgrades for the coroner’s building and Northampton County Prison, Brown said.

“As you can see, expenses and revenues are out of balance, and we need to do what we can to bring this back to balance,” he said.

Brown said $17 million was returned to the general fund in 2014, which translates to about 20 percent of tax revenue, and benefit costs were also reduced through a restructured health care plan. Looking ahead to this year, he noted the 2015 budget came in $17.3 million lower than last year, but also had $9.4 million less revenue.

The county will continue its efforts to evaluate its health care plan to reduce benefit costs, he said, as well as work to reduce spending, realign the workforce, make technology upgrades at Gracedale and other county offices, review multiple contracts, and work toward implementing a post-conviction drug court, which has been a joint effort with the prison and county courts.

Brown also spoke of tax revenue opportunities that Northampton County faces, including the new Route 33 interchange, which could create up to 5,000 jobs. Others include Bethlehem’s City Revitalization and Improvement Zone (CRIZ), the Fed-Ex Ground project in Allen Township, the Green Knight industrial park in the Slate Belt, and a new revolving loan/grant program.

Brown said he seeks to create a culture that embraces change rather than the “status quo,” and is reviewing every department for operational improvements, as well as every current purchasing and vendor contract for savings opportunities.