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County Executive Robert P. Astorino on Nov. 14 released a proposed $1.7 billion budget for 2013 that does not raise taxes, marking the third consecutive year that Astorino's budgets have reduced or kept flat the county's tax levy on property owners.
Faced with $97 million in automatic and uncontrollable cost hikes from unfunded state mandates and pre-existing labor contracts, the proposed budget nonetheless continues to deliver essential services and preserve the safety net for the county's neediest residents. No layoffs are planned to the departments of Public Safety and Health and no service cuts are planned for the Bee-Line Bus system. Additional programs will be funded for legal services, veterans, seniors and victims of domestic violence.
The proposed budget now goes to the Board of Legislators, which has until Dec. 27 to adopt a final spending plan.
Actions necessary to balance the budget, which is required by law, include the following:
- Reducing the workforce by 189 positions, including 126 layoffs – something that could have been averted had the county's largest union agreed to contribute to the cost of its health care;
- Participating in the state's pension amortization program, which essentially means the county will defer approximately $35 million of 2013's $91 million employee pension bill;
- Bonding $13 million of court-ordered tax reductions, known as certioraris, so the money does not have to come from the operating budget.
"The story of this budget is not what is but what could have been," said Astorino. "I pleaded with our largest union, the CSEA, to help avoid layoffs. Had they followed the lead of three other unions to start contributing to the cost their health care, we could have saved jobs and programs. But they refused. As a result, layoffs and other cuts are regrettably my only option. It's sad and ironic that the union leadership charged with protecting the jobs of its members ignored my repeated requests to help save jobs."
With Westchester County already facing the highest property taxes in the United States, Astorino said raising taxes was not an option. Since taking office, Astorino has cut county spending and the county property tax levy has been reduced by 2 percent. County taxes make up about 15-20 percent of a typical property tax bill. The remaining taxes are levied by local governments and special districts (15-20 percent), and school districts (60-70 percent).
"So many of our homeowners are struggling, especially seniors whose biggest expense is often their property taxes," said Astorino. "They need and deserve some help. Our focus has been and remains on preserving essential services – but also bringing down their costs so we can afford to keep our safety net in place for our most needy. This is what we owe our taxpayers."
The proposed budget seeks to protect Westchester's three triple-A ratings by continuing a bi-partisan pledge made last year with the Board of Legislators not to dip into the county's unrestricted reserves or so-called "rainy day" fund to pay for day-to-day operations. Moody's has put the county on a "negative outlook" because of concerns over continuously using the reserves. A downgrade from a AAA rating would make it more expensive to borrow money.
"Hurricane Sandy put a spotlight on the importance of making sure our reserves are available for emergencies," said Astorino. "For years, the county had been using emergency funds to pay for operating expenses. It's the equivalent of paying the cable bill with the kids' college money. You can do it, but when you need the college money, you could be out of luck. The unrestricted reserve fund is for emergencies. Now more than ever we need to make sure it stays strong and is used in the way it is intended. Otherwise, we risk losing our excellent credit ratings, which will only make running government more expensive."
In crafting the $1.719 billion proposed budget, Astorino had to make up an $85 million shortfall; the imbalance between a projected revenue increase of $12 million and a projected spending increase of $97 million.
Astorino said unfunded mandates forced on localities by Albany continue to pose a critical threat to the county's finances. Medicaid, pensions and seven other unfunded state mandates will consume 85 percent of the county's tax levy in 2013, leaving only 15 percent for local needs like parks, public safety and day care. He said the state's 2 percent tax cap did little to help because it did nothing to curb state spending.
"A tax cap without a spending cap is a joke – a cruel one," said Astorino. "One state mandate – pensions – puts the county over the tax cap. The bottom line is that for every dollar the county sends to Albany, it only gets 45 cents back. This kind of Albany math is crushing us."
Layoffs would be far more numerous – and would in fact cripple county government, if the legislators do not agree to amortizing the pension costs and the bonding of certioraris, the county executive said. But here again, the "help" from Albany will end up costing local taxpayers. Because of its AAA credit ratings, the county can currently borrow at just over 1 percent in the market. But under state law, the county may only borrow for pensions from the state, which charges 3 percent – a difference that will cost Westchester residents an extra $2 million to $3 million.
Unlike pensions, the county can borrow for certioraris on its own. Astorino said that the cost of bonding the certioraris – something he is reluctantly advocating for, will cost the county only $40,000 annually over the five-year life of the bonds thanks to the county's top credit rating.
The layoffs proposed by Astorino will affect most county departments, but fall most heavily on Social Services; Parks; Public Works and Transportation. In addition to the 126 layoffs, 63 vacant positions will also be eliminated. The 189 job eliminations reflect a reduction of almost 4 percent in the county's overall workforce of 4,979.
In asking the Civil Service Employees Association (CSEA) and several smaller county unions to contribute to the costs of their health care, Astorino was asking them to follow the lead of three other county unions that have, through collective bargaining, recently agreed to contribute. They are: Teamsters Local 456, which represents middle-level management; the Correction Officers Benevolent Association (COBA); and the Corrections Superior Officers Association (SOA).
In addition, nonunion employees, including Astorino and his staff, have been contributing to their health care since 2010 when Astorino first proposed this.
2013 Cost Increases
Major costs drivers in the 2013 budget include:
- The county's share of Medicaid, the federal and state mandated program to provide health care for the poor, up $8 million (to $224 million).
- Employee pension costs are up $12 million (to $91 million). Under the amortization program, the county would pay $35 million of this year's pension costs over 10 years with an annual interest rate of 3 percent.
- Employee health care up $5 million.
- Employee salaries up $15 million.
Key 2013 Revenues of the Proposed Budget
Revenues will be flat in 2013, rising only $12 million or less than 1 percent.
- Money raised from the county property tax will remain the same at $548 million.
- The county's portion of the sales tax is projected to increase by $12 million, or about 3 percent, for a total of $376 million.
- State and federal aid is expected to be flat.
Astorino has added $50,000 to the $1.7 million allocation for Legal Services of the Hudson Valley to expand programs out of the Peekskill office for veterans, seniors and victims of domestic violence, eviction and foreclosure proceedings.
- The 2013 budget, just as the 2012 budget did, proposes cutting all funding – $3 million – for the three neighborhood health centers in Ossining, Peekskill and Mount Vernon. Astorino said these centers have strong surpluses, combined assets of $57 million and the salaries of their three top executives total nearly $1 million.
- There are no cuts to Bee-Line buses.
- The budget would reduce funding to the Cornell Cooperative Extension to $600,000, from $990,000.
- The county's day care program will be budgeted at $26 million, the same allocation as 2012, and parents who receive non-mandated services will contribute up to 35 percent of their income above the poverty level. If parents have more than one child in the program, those children are free. The 35 percent parent share is necessary to fully fund the program and is the same rate parents in New York City and 20 other counties pay. This year, the program is expected to be over budget by $3 million.
- The safety net for the county's most needy will be preserved though a social services budget of more than $550 million.
- All county parks and nature centers will remain open, but the number of curators will be reduced from six to three.
- Playland will remain open in 2013, as the county proceeds with the Astorino initiative to turn operations over to Sustainable Playland Inc., a Rye-based not-for-profit that plans to retain the traditional summer amusements and introduce new activities to make the 100-acre park a year-round destination.
The assumptions in the 2013 budget are based on finishing 2012 with a balanced budget. With six weeks to go, the county is within 1 percent of forecast and expects to meet its 2012 targets.
A separate capital budget for 2013 has also been submitted, which reflects the Astorino administration's commitment to maintaining vital public infrastructure and promoting economic growth.
The total capital budget proposed for 2013 is $198 million, an increase of $33 million from 2012. Projects proposed include improvements to bridges, roads, sewers, water districts and the county airport, as well as technology upgrades and renovations to parks. There is added $10 million for flood mitigation.