CE Astorino proposes a $1.689 billion budgetCounty Executive Robert P. Astorino  on Nov. 15 presented his county spending plan for 2012 that has no increase in the county property tax levy, cuts spending by $100 million and continues to provide essential services and aid to those most in need.

Astorino's proposed $1.689 billion budget also keeps Playland open and the Bee-Line Bus service intact. The proposal reduces the workforce 7.5 percent by eliminating 367 jobs, including 210 by layoff. The layoffs are the reluctant but necessary result of the failure by the county's unions to work with the county executive on the "jobs for savings" offer he made to them upon coming into office two years ago. Review all three proposed budgets.

To protect the county's three AAA bond ratings, Astorino's proposal institutes a major financial reform by not using any of the county's fund balance, the so-called "rainy day" fund, to balance the operating budget. Under the proposed budget, the fund balance would be maintained at its 2011 level of $110 million – to be held for its intended purpose of funding unforeseen situations and emergencies. Stabilizing the fund balance addresses criticism from Moody's, the rating agency, that the county has been drawing down its reserves over the last six years to levels that jeopardize its AAA status. Review Astorino's slide presentation.

"My budget is responsible and follows my principles of providing tax relief, preserving essential services and promoting economic growth," said Astorino. "I was elected on a promise that I would control county government taxes, and with this budget we have done so for the second year in a row. This was particularly difficult because our revenues are basically flat, but the automatic increase in costs of health care and pensions for our employees continue to soar and are rising beyond our ability to pay."

No Tax Increase
The county property tax levy for 2012 would be $548 million, the same level as 2011. It follows a 2 percent reduction in 2011.

Every $5.5 million in net spending amounts to about a 1 percent increase in the county property tax levy. Even with no change in the tax levy, some property owners may find their taxes go down, others up, due to variations in assessing practices from community to community that are "evened out" through the state's Equalization Rate. County government taxes account for about 15-20 percent of a taxpayer's property tax bill. (The rest is collected on behalf of school districts, local governments and special districts.)

In addition to the operating budget, the county executive also released his proposed capital projects budget today, as well as budgets for the county's special districts (sewer, solid waste, and water).

These budgets now go to the Board of Legislators, which has until Dec. 27 to approve a final spending plan for next year. The proposed budgets are available on line at: www.westchestergov.com/budget

No Help From Unions
To present a balanced operating budget, which is required by law, the county executive had to address a projected shortfall of $114 million for next year. Astorino had hoped to close $19 million of the shortfall by having unions contribute to the cost of their health benefits, whose $100 million a year bill is currently paid entirely by taxpayers.

Under his "jobs for savings" plan, Astorino had asked Westchester's unions to make the same health care contributions as those recently accepted by state unions. The deadline for submitting the proposed budget was today. Without the concession, balancing the budget required 210 layoffs.

"Tough choices had to be made, and I regret that layoffs are necessary to balance this budget," Astorino said. "I had asked our employee unions to pay for part of the cost of their health care – just like everyone else does these days – as a way to save these jobs, but to date they have refused. My proposal is no reflection on the outstanding job done every day by our employees. It is just a necessary response to our unsustainable labor costs. The simple but harsh reality is that if we can't bring our labor costs down, we are going to have to have fewer workers."

Between the years 2005 and 2010 the number of Westchester County government employees grew by about 5 percent. The 2012 proposed budget continues to reverse that trend. Overall, there is a 7.5 percent proposed workforce reduction for 2012. Combined with the 2011 reduction, that is about a 15 percent reduction in the county's workforce since the beginning of the Astorino administration.

The 2012 budget proposes 210 layoffs and 157 net position eliminations. That leaves the county with a workforce of 4,504 employees, down from 4,871. The layoffs are proposed in departments across the board.

For example, Social Services, the county's largest department in terms of budget and personnel, has 71 layoffs, representing a 6 percent cut. Probation has 15 layoffs or 7 percent of the department; Public Works has 30 layoffs or 12 percent of the department; and Parks has 26 layoffs or 9 percent of the department.

The 210 layoffs will save the county approximately $14 million. The average current salary of a county worker is $71,324. In contrast, $62,900 is the average salary of a private sector employee working in Westchester, according the New York State Department of Labor's latest (2010) statistics. When fringe benefits are added to salary, the average compensation of a county worker rises to almost $110,000. Fringe benefits, which include healthcare and pension contributions, amount to 54 percent of salary. Next year, average total compensation is projected to increase to $120,000 with fringe benefits remaining at about 54 percent of the salary.

Budget Gap Elimination
Astorino's plan to balance the 2012 budget calls for eliminating the $114 million shortfall with:

  • $83 million to come from across-the-board cuts in county departments.
  • $14.5 million to come from bond restructurings, which includes $2 million from refinancing bonds at more attractive interest rates and $12.5 million from accelerating payments from a 1998 settlement with tobacco companies.
  • $16.5 million in one-time savings, which among other measures include $4.4 million in lower healthcare claims – the county is self insured and its costs were down this year – and $5.1 million in pension savings resulting from this year's 10 percent reduction in the county's workforce.

"It is not enough to simply balance the budget, how you do it is critical," said Astorino. "This budget is structurally sound because most of the actions will produce recurring savings for years to come. The ratings agencies like at least two thirds of budget actions to be recurring in nature. This budget has 73 percent recurring actions, which should be viewed very favorably by ratings agencies."

On Monday, the third of the three ratings agencies reaffirmed the county's AAA ratings.

The key obstacle to balancing the budget was that revenues could not keep pace with costs. On the revenue side, for example, there is little to no growth expected in 2012:

  • The county property tax levy, which accounts for 32 percent of all revenue, is being held flat at $548 million.
  • Sales tax, which accounts for 28 percent of revenue, is projected to rise 3.25 percent to $364 million.
  • Mortgage and hotel taxes are both expected to come in basically flat at $13.5 million and $5 million, respectively. Together, the two taxes account for about 1 percent of revenues.
  • Federal and state aid is a mixed bag with federal aid expected to decline by $10 million to $200 million and state aid expected to rise by $3 million, to $245 million. State and federal aid make up about 26 percent of the county's revenues with remainder coming from fees, investments, rents and other income.

Expenses on the other hand continue to soar with automatic escalators built into many contracts.

  • Materials and supplies were projected to increase $3 million to $441 million. Even with low inflation, the costs of gasoline, electricity, and heat continue to rise.
  • Medicaid expenses, despite a 3 percent cap, will increase by $4.5 million next year to $216 million.
  • Salaries, even with a 10 percent reduction in the workforce this year, were projected to go up $9 million in 2012. The CSEA, the county's largest union, is just finishing a six year contract in which the union received an 8 percent salary increase over the last two years. In addition to the salary increase, the contract calls for lucrative step increases, which are additional payments for the first five years in a job, and longevity payments for those in a job more than five years.
  • Pension costs will increase between $10 million and $13 million depending on the final size of the workforce next year.

No Pension Amortization
The pension costs for 2011 are $68.5 million. While the county could initially pay a lower amount by opting into the state's pension amortization program, Astorino said he was rejecting the move because of the long-term borrowing costs associated with program. The current interest rate charged by the state is 5 percent with the rate dropping to 3.75 percent in 2012.

"By paying our pension bill in full this year, the county will save $3 million," Astorino said. "We have the funds available, so it makes no sense to pay the high interest rates. It would be like paying for the groceries with a high interest credit card. If we need to go into the state amortization plan at some point, we should at least wait until the interest rate drops. I can't say it strongly enough – the county should not go into the state's amortization program this year."

Despite the expense and revenue challenges, the proposed budget preserves essential services, especially for the county's neediest. Following are summaries of budget actions in key departments.

Department of Social Services
The proposed budget calls for spending $562 million in DSS in 2012, down 2.8 percent from this year. This reduction in spending can be attributed to a $14.5 million cut in federal stimulus money. In contrast, the county's contribution to DSS for 2012 remains the same as 2011.

"Our commitment to maintaining a safety net for our neediest residents remains strong," Astorino said. "To stretch dollars, we are putting money where it can do the most good and managing our resources in ways that serve the greatest numbers."

Other DSS highlights:

  • Daycare: The parent share for non-public assistance child care is being increased to 35 percent. This increase reinstates the same contribution level as in 2006 and is also the same share that parents in New York City pay. This increase will allow the county to serve more families by spreading funds more broadly.
  • Foster Care: The county continues to save money and improve service by keeping children closer to home and reducing the number of children in foster care.
  • Technology: Call centers and web applications like REACH have allowed us to automate services.

Public Works/Transportation
The proposed 2012 Public Works budget calls for a 10.4 percent decrease in expenditures, from $15.2 million in 2011 to $13.6 million. The proposed 2012 budget for Transportation increases expenditures by 4 percent, from $130 million in 2011 to $135 million in 2012.

Other Highlights: The Bee-Line Bus system remains intact. The biggest modification is that the contract with the company running Route 76 in Rye and Port Chester will be discontinued. Cancelling the contract saves the county $243,436. This was the only route the company maintained for the county. The county's current Route 13 will be modified to provide service to the 160 riders of Route 76, only 30 of whom will be affected by the change. With the change, passengers for the first time will be able to ride from White Plains to Rye without transferring buses.

Parks
This proposed budget calls for a 5 percent reduction in spending for Parks and Recreation, bringing expenses down to $48 million from $51 million in 2011.

Other Highlights:

  • The amusement park at Playland will be open for the 2012 season. Despite a $1.5 million decline in amusement park revenue in 2011, it would still be more expensive to close the park next year than to keep it open. This is because substantial maintenance and debt service costs continue even when the park is closed. A better handle on Playland's long-term future hopefully will emerge early next year when the next stage of the "Reinventing Playland" requests for proposal will be complete.
  • Golf fees are to increase by $2, except at Hudson Hills.
  • The six nature centers will be closed.
  • Funding for Ethnic Festivals, Bicycle Sunday, Lasdon Concerts, Battle of the Bands and the 4th of July Fireworks at Kensico Dam has been dropped from the 2012 budget. Talks are underway to have these events sponsored by private donors and corporations. The model being used is the public-private partnership developed last year to continue the operation of Hilltop Hanover Farm. A public-private arrangement has already been put in place for this year's performances of the Nutcracker at the County Center.

Public Safety
The Department of Public Safety will reduce spending from $37.6 million in 2011 to $36.4 in 2012; a decrease of 3.4 percent.

Other Highlights:

  • The 24/7 police post at the Michaelian Office Building in White Plains is being modified to have officers present only during normal business hours. This will allow officers to be deployed to other areas, which will reduce overtime.

Health
The proposed 2012 Health Department budget calls for a 3 percent spending change. This reduces the department's budget to $160 million from $165 million. The majority of the department's budget is for mandated Early Intervention and Pre-school special needs services.

Other Highlights:

The budget proposes ending non-mandated contracts with three neighborhood health centers. These health centers are eligible to receive millions in funding from the federal government. Ending their contracts will save the county $1.9 million. It's also important to note that all three health centers have budget surpluses and the executive directors of these centers have combined salaries of over $1 million a year. Clients without insurance are advised to apply to Medicaid in order to keep receiving care.

The three neighborhood health centers are Mount.Vernon Neighborhood Health Center (serves Mount Vernon, Yonkers and Greenburgh), Hudson River Healthcare (Peekskill and Yonkers) and Open Door Family Medical Center (Ossining, Port Chester, Sleepy Hollow and Mount Kisco).

These centers are not run by the county and are independent non-profit agencies. The county is not mandated to provide financial assistance to the health centers, and the centers receive from health insurance, federal, state and private sources, in addition the county's historical subsidies.

To cover services of the uninsured, the centers could increase health insurance enrollment of clients, as there are many options for children to be enrolled in health insurance and new insurance options over the past year for young adults and individuals with pre-existing health conditions.

Of note, all three health centers have been operating with budget surpluses and the executive directors of these centers have combined salaries of over $1 million a year. Ending their contracts will save the county $1.9 million in tax levy funds.

Miscellaneous

  • The Miscellaneous budget will decrease from $410 million to $395 in the proposed 2012 budget. This budget eliminates funding for Cornell Cooperative Extension (saving $990,000) and reduces the ArtsWestchester grant by 50 percent, which will save $750,000. Unfortunately, the county cannot afford these subsidy levels.

Other Budgets

  • The proposed capital projects budget for 2012 calls for $112 million in new spending, including $104 million for general projects and almost $8 million specifically for the development of affordable housing. The $112 million compares with $138 million for 2011.
  • The budgets for the individual sanitary sewer districts reflect the increases for debt services associated with recent capital projects. However, by reducing operating and maintenance costs wherever possible, 11 of the 13 sewer districts will not see any tax levy increase and one will go down. Only the New Rochelle sewer district will have a tax levy increase, due to costs associated with a consent order with the state Department of Environmental Conservation.
  • The tax for those communities in the Solid Waste District (all but a few northern Westchester communities) will remain flat.