CE Astorino talks about projections for the 2012 budget In a preliminary view of Westchester's 2012 finances, County Executive Robert P. Astorino said last week that the county was facing a $114 million budget shortfall next year and that he planned to close the gap without raising taxes by cutting spending, instituting a one-week furlough and having union workers start contributing toward their health insurance as a trade off to avoid approximately 250 layoffs.   

"A tax increase is off the table," said Astorino. "With Westchester residents already paying the highest property taxes in the United States, we simply cannot afford to increase that burden. Living within our means will require tough decisions. Our goal is to make smart choices to bring down spending in ways that increase efficiency while still preserving essential services."

You can preview Astorino's budget outlook for 2012.

Expenses in next year's budget are currently projected to increase by 5 percent to $1.802 billion. In contrast, revenues are projected to be up just 1 percent, coming in at $1.688 billion and leaving a gap of $114 million. By law, Astorino must present a plan for a balanced budget to the Board of Legislators by Nov. 15.

To balance the budget, Astorino outlined the following initiatives.

  • Recurring savings: $52 million. All department heads have been asked to reduce their respective budgets between 10 and 20 percent. Details of the specific plans are still being finalized. Every department and program is being scrutinized, but the county's safety net will remain in place. "The budget will not be balanced on the backs of the county's most needy," Astorino said. "While we expect to find savings in all departments, including the Department of Social Services, it appears likely that spending in DSS for 2012 will come in about the same as 2011."

  • One-time savings: $39 million. These savings include lower interest rates on county bonds, lower retirement costs because of last year's 10 percent workforce reduction and lower insurance claims in 2011. Any money taken from the county's fund balance or so-called "rainy day fund" would also be part of this category. The money here is limited because the fund balance is now approaching 5 percent of operating expenses. Dipping close to or below that level could jeopardize the county's triple A bond ratings, which in turn could increase its borrowing costs. "Over my objections, the Board of Legislators took more out of the fund balance for the 2011 budget than I thought was prudent," Astorino said. "The consequence is that there is less money available for next year. This isn't alarmist. It is an economic fact that we will have to manage the fund balance carefully this year."

  • Jobs for savings: $23 million. The money here would come from a one week furlough ($4 million) and contributions by union employees to the cost of their health insurance ($19 million) or approximately 250 layoffs.

Astorino said he hoped to keep layoffs to a minimum, but he needed the help of the county's unions. Saying the time had come for union members to start contributing toward their healthcare benefits, he made the following case:

  • The county's non-union employees already contribute toward their healthcare insurance, as do almost all public and private sector employees in the United States.

  • The healthcare contribution the county is seeking is the same one proposed by Governor Cuomo and agreed to by the state Civil Service Employees Association. The CSEA is the county's largest union.

  • The after-tax cost to a typical employee would be $16.75 a week for individual coverage and $85.50 a week for family coverage.

  • The wages earned by county employees, as a group, are higher than their private sector and fellow public sector counterparts working in Westchester. County employees earned $71,324 on average in 2010. Those wages compared to $62,900 for private sector employees and $69,112 for all public sector employees as a group, according to the New York State Department of Labor.

"Westchester's union employees have to start paying for their health insurance just like everyone else," said Astorino. "It is simply no longer fair or affordable for taxpayers to pick up 100 percent of the cost of the county's $100 million a year healthcare bill. Asking union workers to pay for healthcare is going to cost them some money. But the alternative is that 250 of their colleagues will lose their jobs. My goal is to minimize layoffs and I hope it's a goal the unions will embrace."

Astorino hosted a town hall style meeting with county employees Wednesday at the County Center.

The biggest challenge in balancing the budget, Astorino said, was that many large expenses such as labor, pension and Medicaid have crushing automatic cost increases built into them. For example, Westchester's Medicaid expenses are projected to increase by $9 million next year to $220 million; pension costs will increase by between $7 million and $19 million, depending on whether the county decides to pay them at once or amortize them; and labor costs are projected to increase by $23.4 million to $597.2 million, despite last year's workforce reduction.

"On January 1, the cost of government automatically goes up each year," said Astorino. "Balancing the budget is like Sisyphus endlessly trying to push the boulder up the hill. Despite all we've accomplished, it is hard to make any real progress. That is why we need to make structural reforms like having all employees pay for healthcare and pushing Albany to stop sending the bills for unfunded mandates to local taxpayers."

This year, the cost of state unfunded mandates to county taxpayers was $416.5 million. Astorino said Albany was taking some encouraging first steps, but more needed to be done. Unfortunately, he said, he didn't see much help arriving in time for the 2012 budget.

"I support the legislation calling for Albany to take over the cost of Medicaid, but even if it passes, the relief toward this year's budget shortfall would be minimal," Astorino said.

County property taxes account for about 15 to 20 percent of a property tax bills. The remainder is levied by school districts, local governments and special districts. For 2011, the county government share of property taxes was reduced by 2 percent. Astorino announced earlier this year he would not raise property taxes for 2012. The County Executive's 2012 Budget Outlook is available at www.westchestergov.com.