Six months into 2010, the projected deficit for next year remains enormous despite ongoing efforts that have shaved off more than $36 million, County Executive Robert P. Astorino said Wednesday.
"In March, I reported that the county faced a $166 million deficit for next year," Astorino said. "While policies implemented by my administration have reduced the shortfall, a bleak financial forecast and many difficult decisions remain in front of us, and the projected deficit still stands at a crushing $130 million."
The county executive gave an update on his budget projections at a news conference today in which he announced his latest cost-saving measures. He has directed each of his department heads to come up with savings plans that would reduce the net costs of their operations by 20 percent. This would raise about $94 million.
In addition, he renewed his call for "jobs for savings" from the county government's unions – contributions by workers to their health care and a salary freeze – so that massive layoffs can be avoided. If made, the two concessions would equate to $26 million in reduced costs and save 260 jobs. Every $1 million saved equals 10 jobs.
"Time is of the essence," he added. "The more work we can do to target areas of savings between now and the submission of the budget in November, the better we will be able to minimize layoffs, make the least painful cuts and produce the greatest efficiencies in how we run operations."
The key factors driving the budget remain the soaring costs to the county of employee pensions and employee medical care and substantial drops in state and federal aid.
In 2010, the county budgeted $55 million for pensions; this number is projected at $75 million for next year. The county's budgeted cost for employee health benefits has more than doubled over the last decade – jumping from $67 million in 2000 to almost $149 million this year. It is expected to go up another $8 million next year. State and federal aid is expected to be about $30.6 million less than this year.
Every $5.6 million in net spending amounts to about a 1 percent increase in the property tax levy. A $130 million hole in the budget would require a county property tax increase of about 23 percent.
County government taxes account for about 16 to 20 percent of a property owner's full tax bill.
The county executive reiterated his pledge that he will not raise county property taxes to close the deficit.
"Taxes are off the table," Astorino said. "I was elected to put a stop to tax growth, and that's what I plan to do. Our taxpayers can no longer afford to live in a county with the highest taxes in the country."
The Good News
- Savings plans: When he took office in January, Astorino directed his department heads to come up with savings plans. As a result, the county is on target to save $12 million this year.
- Voluntary separations: The county's voluntary separation agreement and a state retirement incentive are expected to generate about $14 million in savings this year and beyond.
- Sales tax: Revenues were up in June beyond the 4.4 percent that was anticipated in the 2010 budget. This is just one month, and there is no guarantee the trend will hold. The county is, however, hopeful that actual sales tax revenues for 2010 will come in $4.6 million ahead of budget.
"Even if we get the extra sales tax revenue, it is only a small dent in the deficit," Astorino said. - Health care: About $1 million in revenue will be generated from the requirement that non-union management contributes a portion of their healthcare costs.
- Fund balance: The county closed the books on 2009 with a fund balance of $29.6 million. This can be used towards the 2011 budget. This is $2.6 million more than originally anticipated in the budget projections from March.
The Bad News
- FMAP: The federal government has not come through with the "FMAP" money it gave the county in 2009 and 2010. The county had hoped that this additional aid for Medicaid would bring in $20 million. Luckily, the administration did not count on this money when it made its budget projects in March nor is it counting on it now.
- Union concessions: So far, the unions have not agreed to any contract concessions. Astorino has asked the unions to contribute 10 to 20 percent to their health care and forego a 4 percent raise for 2011. Respectively, these actions would raise $9 million and $17 million.