July 18, 2012 -- Westchester County has officially "closed the books" on its 2011 budget and issued its 2011 Financial Statements, which for the first time in a decade showed a decrease in the county's tax levy.

"The 2 percent cut in the 2011 tax levy signaled the beginning of our efforts to reverse the bad habits of tax and spend that landed Westchester County in the dubious position of being the highest taxed county in the United States," said County Executive Robert P. Astorino. "We have followed 2011 with a 2012 budget with no tax increase and a commitment not to raise taxes in 2013. We have to make Westchester more affordable and the 2011 tax cut was our down payment on that goal."

With fully audited financial statements in hand for 2011, the county can now go into the 2012 bond market. The county hopes to save about $1 million in interest payments when it goes into the bond market on July 25 to refinance about $20.7 million in existing debt.

"Thanks to the diligence of our Budget and Finance departments in closing the books, the county can now take advantage of record low interest rates, as well as our three triple A credit ratings, which also lower borrowing costs," said Astorino. "These savings are critical because expenses, particularly unfunded mandates such as Medicaid and pensions, and other areas like health care, continue to soar."

The county's expenses of $1.76 billion in 2011 exceeded its revenues by $8.5 million. To make up the difference and balance the books, which is required by law, the county had to move money out of its fund balance or so called "rainy day" fund, which is designed to offset budgetary imbalances. Originally, it looked like as much as $40 million would be needed to balance the 2011 books. But tighter management, coupled with cost savings like retirement incentives, narrowed the gap.

Astorino said it was important to minimize use of the reserve fund because drawing it down too low could jeopardize the county's triple A credit ratings.

The year-end, unrestricted fund balance for 2011 was $137.6 million, which represents 7.8 percent of county operations. The median level for a similarly sized triple-A-rated county is 12.7 percent. At 7.8 percent, Westchester is on the low end of the scale.

"Losing our triple A ratings would be the equivalent of a tax increase because it would increase our cost to run county government," said Astorino. "The way we protect our triple A ratings is to keep the reserve fund strong. While it is tempting to think there is a lot of money in it, the reserve fund is at a low level and needs to be used only as a last resort, not as an ATM for normal operating expenses."