No Cuts. No Hikes. No Surprises in 2016 Budget for County

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WPCNR COUNTY CLARION-LEDGER. From the Westchester County Department of Communications. November 13, 2015:

Westchester County Executive Robert P. Astorino today proposed a $1.8 billion budget for 2016 that preserves essential services, maintains the safety net for the county’s neediest residents and for the sixth straight year does not raise the county tax levy.

“This budget demonstrates that the county can live within its means,” said Astorino. “Every year there are challenges. This year sales tax revenues are down and unfunded mandates from the state and federal government continue to rise, but through smart management we have put together a budget that balances our dual obligation of providing essential services and keeping Westchester affordable for our seniors, young families, and businesses.”

The proposed 2016 budget holds spending flat to the 2015 level of $1.8 billion, which is still lower than when Astorino took office in 2010.

Once again, Astorino has crafted a budget that operates within what he calls the two “goal posts” of no increase in the tax levy and no raiding of the unrestricted fund balance – the so-called rainy day or emergency fund – to pay for day-to-day expenses. As a result, there is no increase in the tax levy, which stays at $548 million, or the unrestricted fund balance, which stays at just under $140 million.

Protecting Taxpayers

Astorino said keeping taxes flat was critical to protecting taxpayers in Westchester, which is the highest taxed county in the United States. After five years of no tax increases, he said, pressure would mount from some this year to raise taxes. But he said that would be a step backwards, pointing out that if the county had raised the tax levy just 2% a year since 2011 when the state’s cap went into effect, the cumulative cost to Westchester taxpayers would have been $167 million.

“By anyone’s standards $167 million is real money,” said Astorino. “That’s money that has stayed in the pockets of seniors, young families and business owners for them to spend on the necessities in their lives. The zero tax increase is how we keep essential services affordable to the people paying the bills.”

AAA Credit Ratings Affirmed

Astorino used the occasion of his budget announcement to note that both Standard & Poor’s and Fitch reaffirmed Westchester’s AAA credit ratings, the highest levels, this week.

The ratings agencies also gave Westchester a “stable outlook,” as did Moody’s, which gave Westchester its second highest rating AA1. No county in New York has a higher credit rating from the three agencies than Westchester, which means the county gets the most favorable interest rates on its borrowings.

“These ratings are a vote of confidence in how the county’s finances are being managed,” Astorino said.

Mandates from Washington and Albany Cost Westchester $900 Million

Unfunded mandates from the state and federal government remain the county’s biggest financial hurdle. Requirements from Washington and Albany will consume 75 cents of every dollar in the 2016 budget. This money pays for jails, Medicaid, and a variety of other worthwhile health and social services programs. The challenges for the county are that it has little to no control over the cost of these programs and that Washington and Albany pay only a third of the bill.

“Here’s the math,” said Astorino. “Washington and Albany tell us we have to spend $1.35 billion on their programs, but only give us $424 million to pay the bill. That means county taxpayers have to make up the $926 million difference and once that’s done, there’s only $450 million left to pay for all of the county’s own expenses – the money that goes to buses, roads, bridges, parks, police, libraries, arts and not-for-profits.”

Astorino added that the stress on local taxpayers is made worse by the lack of local say in how state and federal programs are administered. “The issue isn’t the programs themselves, it’s that we have little to no say when it comes to making the programs more accountable and efficient. The one-size-fits-all mentality from Washington and Albany is a prescription for ever escalating costs.”

The county’s finances are also being hit by a decline in sales tax revenue, caused primarily by lower energy prices and bad weather earlier this year. The budget projects that sales tax collections will rebound in 2016, but the 4% increase is calculated off a lower baseline because 2015 collections are running about $24 million behind initial projections.

Another negative factor is a decrease in aid from Washington. Federal aid in 2016 is budgeted at $182 million, a decline of $7 million or about 4% from this year. State aid is projected at $241 million, which is roughly flat to this year.

No Cuts to Child Care, Libraries and Bus Routes

Despite the financial challenges, the budget maintains Astorino’s commitment to serving the county’s neediest residents. Spending for the Department of Social Services (DSS), which administers the county’s safety net programs, is budgeted at $595 million, the same level as this year. This means there will be no cuts to the funding for child care, or a need to raise parent contributions from the current level of 27 %, which is lower than New York City and many other counties around the state. Westchester’s program is also open to more applicants than most other counties.  Funding will be at 2015 budget levels with capacity maintained at 2,637 slots for the low-income program and 175 slots for the Title XX program.

Transportation is also being protected. All of the Bee-Line Bus System’s current routes will remain intact as a result of more than $27 million subsidies from the county budget. However, late-night and weekend bus runs on a few routes are being discontinued due to extremely low ridership.

Funding from the county to Westchester’s public library system is untouched, with the contribution for 2016 remaining at its current level of $1 million.

Balancing the budget will require some reductions to the money the county gives to not-for profits.  The proposed budget calls for grants of $2.3 million to Legal Services of Hudson Valley, $1.3 million to Arts Westchester, and $577,000 for the Hudson River Museum and $200,000 for Cornell Cooperative.

“The decreases were the result of financial necessity and don’t reflect on the value of the programs,” said Astorino. “We were forced to make tough decisions, and we have tried to make them in a reasonable way.”

Efficiency Initiatives

To bring expenses in line with revenues, county departments have launched a number of initiatives. For example, DSS is digitizing application forms and setting up on-line kiosks to reduce paperwork and man hours and improve record keeping; moving the homeless into permanent housing faster; and expanding job training opportunities to move people from welfare to work. The Information Technology Department expects to save $50,000 a year by cutting back the number of county issued cell phones.

“We have literally looked at every expense,” said Astorino. “Some of them are not that big, but every dollar of savings counts.”

One new program is called “A Job Is Waiting for You.” This is a partnership between DSS, the county’s Industrial Development Agency and Workforce Investment Board, area colleges and the health care industry in Westchester. The idea is to provide training for good paying jobs to the hard to employ in the field of health care in areas where companies are struggling with a shortage of workers, as is the case with MRI technicians. The program’s first “boot camp” is underway.

Average Compensation for a County Worker Is More Than $128,000

The biggest single expense in the budget is employee compensation. The average salary of a county worker is $79,350, compared to $66,765 for private sector workers. Total compensation for county workers jumps to $128,333, when health care, pensions and other benefits are added.

Since coming into office, Astorino has worked to control the cost of fringe benefits, which amount to 62 percent of salary, by negotiating contracts that require employees to pay a portion of their health insurance. Seven of the county’s eight unions currently contribute to their health care, saving taxpayers about $5 million a year. The county’s largest union, the Civil Service Employees Association, is the one hold out and rejected a neutral fact-finder’s recommendation last year, which Astorino accepted, that would have included health care contributions.

Workforce Reduction Includes 25 Layoffs

Astorino has steadily moved to control employee costs. Earlier this year, he offered a separation incentive, which was accepted by 158 employees and is expected to save $3 million this year. To further reduce costs, the proposed budget calls for reducing headcount in 2016 to 4,783 with 25 of the 84 position eliminations coming through layoffs.

“As I have mentioned repeatedly, our county employees are terrific, but they are very expensive,” Astorino said. “If we can’t bring down the cost of our employees, we have to operate with fewer of them. Our preference is attrition and buyouts, but unfortunately the financial situation this year also requires layoffs to balance the budget.”

Since coming into office Astorino has reduced the size of county government by about 900 positions. The smaller workforce means the county can also reduce its real estate footprint. The county has a pending sale of 375 Executive Boulevard in Elmsford whose proceeds will be applied to the 2016 budget.

The county has also been in talks to sell a property in Yonkers on Austin Avenue, which is owned by the County’s Industrial Development Agency. However, no agreement has been reached at this point and may not be reached in the foreseeable future. Without an agreement, any potential revenue cannot be booked in the budget because it would simply be too speculative.

To minimize layoffs, the county will be bonding $11 million to pay for anticipated tax certioraris. Tax certs, as they are commonly called, are claims made against the county by property owners challenging the assessments on which their tax bills are based.

Because of the county’s very good credit rating, bonding $11 million for tax certs will costs about $60,000 in interest per year.  In contrast, it would take 110 layoffs to make up the $11 million saved by bonding the certs.

“Bonding for tax certs is something we do reluctantly,” said Astorino. “But it is a tool that makes sense to use judiciously because it allows us to keep services available and more people on the job.”

Other highlights:

  • Economic Development: A dozen IDA projects this year supported more than $800 million in private sector investment.  The projects, which involved affordable housing, housing for young professionals, millennials and empty nesters, and renovation and expansion of existing corporate spaces, accounted for the retention of more than 130 jobs, the creation of more than 550 new jobs and the need for almost 4,000 construction jobs.
  • Capital Budget – In addition to the $1.8 billion operating budget, Astorino is proposing a $216 million capital budget to finance $180 million in infrastructure improvements throughout the county, as well as $18 million in projects at the county airport and another $18 million specifically for environmental conservation projects.
  • Pensions – Cost are projected at $83 million with the county paying $80 million up front and $3 million through the state’s amortization program.
  • Playland – The iconic amusement park in Rye will reopen on May 7th.

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