WPCNR COUNTY CLARION-LEDGER. By John F. Bailey. November 16, 2007 UPDATED November 17, 2007 With Visuals: The County Executive, Andrew Spano, presented his preliminary 2008 budget this morning calling for a 4.7% tax increase, raising the county budget $24.4 million to $1.78 billion. The budget now goes to the county Board of Legislators for their input. George Oros, County Board Minority Leader told WPCNR the chances of cuts were “Nil,” and predicted cosmetic cuts of about 1% would most likely be made by the Board. He identified $20 Million in cuts he thought the county could execute. The County Executive also showed the county projections of sales tax had fallen well short of projections in 2006 and not only in the present budget year, 2007.
County Executive Andrew Spano Pitching His $1.8 Billion Budget.
The increase in taxes to the individual, Spano said would be about $70 if you’re paying a $10,000 property tax bill. According to the county news release, the county share of a $10,000 property tax tab is $1,500. Mr. Spano noted this would vary depending on the taxpayer’s locality.
The County Executive blamed the increase in the state’s requirement for more detailed student incident reports in schools, which Mr. Spano said resulted in higher caseloads for county personnel because the county had to investigate them. This, he said required increasing the number social service investigators to handle the cases, which often result in foster care.
The case load for County Child Protective Services increased by 886 cases since 2007; for Child Protective Services, 387, and Foster Care, 135 cases. A total of $18 Million of the $24 Million increase was attributed to 22 new positions in the Department of Social Services to cover these new responsibilities, and 5 new positions in the County Attorney’s office for Family Court. There have been 1,000 incidents this year reported in the county, Spano said. He noted that though the state covers increases in some areas, it covers only 70% of the foster care placements, necessitating another part of the increase. Mr. Spano said it was an expense the county had to cover to provide for the children that needed the care.
Sales Tax Shortfall: Optimistic County Sales Tax Projections Do Not Materialize for 06 and 07. County auditors overestimated sales tax revenue increase by 38% in 2006, and so far with three quarters of 2007 complete, overestimated by 40%.
The County Executive lamented that sales tax projections for 2007 had not met projections and could not “offset” costs of existing programs. Mr. Spano showed county projections being off the mark for 2007 $5 Million off, and 2006, $8 Million off. . He reported that net sales tax revenues are budgeted at $371 Million for 2008, or just 1.6% over the 2007 adopted budget. He blamed a slowing economy, and a loss of sales tax to internet sales (but ruled out seeking an internet sales tax).
A slide showed the county projections of sales tax have shown a pattern of optimism on sales tax in 2006 as well. WPCNR asked the County Executive if, in view of the projections the county made being below expectations, whether he would ask the state for an audit of Westchester Sales Tax Receipts, as opposed to what the county is receiving back (from the state), to make sure Westchester is getting its fair share.
Mr. Spano said this was a very good question, saying “I can’t say that we will,” but said the process by which the state determines how much sales tax it sends back to the county, “is very sensitive” and “clandestine.” He referred the question to Ms. Reasoner who explained that the county only had figures through October.
County Budget Director, Ann Reasoner, (whom WPCNR readers will remember as being the former White Plains Budget Director before leaving abruptly for unknown reasons in June 2006), explained that the sales tax projections are a work in progress reflecting figures in to date. She blamed lower car sales, lower spending by utilities, and a slowing of the economy.
Asked directly in the news conference whether he would pursue an audit or accounting of what went up to Albany and what sales tax came back, the County Executive indicated , “No.”
Oros Explains the Sales Tax Anomaly
Mr. Oros, in a telephone interview with WPCNR, reacting to the sales tax shortfall, said the County Executive’s answer is simply to raise taxes, that his, on the other hand was to cut taxes. Oros said he was surprised the County Executive would not pursue an audit of Westchester Sales Taxes with the stat, since the state has not given Westchester County a fair return before.
Oros remembered how the county was shortchanged in transportation aid a few years back and found that Westchester was underfunded compared to Nassau and Suffolk Counties and the county went out and proved it to the state by comparing transit performance between the county and Nassau and Suffolk Counties. He said it would not be too hard for the county to figure out how much it is owed in sales taxes based on the state formula.
The County Executive Says White Plains is Spiking.
Speaking to WPCNR, after the news conference, Mr. Spano said he did not think the state was shortchanging the county on returning fair share of sales tax. Asked to explain how White Plains has experienced five years of raising sales tax receipts while projecting sales tax on the money for each of those five years, Spano said he was not familiar with White Plains budgeting and figures, but that White Plains was “spiking” in sales tax, thanks to increased development, that the county though as a whole was down. He also wondered why White Plains was not getting more sales tax from the development than it is.
City Hall Explains Its Sales Tax Acumen:
Paul Wood, City Executive Officer, back on the job in the Mayor’s office after fighting a viral infection the last month or so, said the secret to White Plains being on the money was not budgeting any more revenue from sales tax in a budget than the city had received in the previous budget year. This provision, Wood said, was in the city charter.
The city’s budget (sales tax) projections have been on target each year WPCNR has covered White Plains. On occasion, the city has executed short-term sales of assets to meet the budget, rather than raise taxes the next year or use fund balance – but it has not been because of over optimism on the sales tax. Nonetheless the budget has been met.
Mr. Oros said the county budget projections were executed by the same firm that audits the City of White Plains. However, Melissa Lopez, spokesperson for the City of White Plains said the firm only audits White Plains, and that the City of White Plains does all of its own projections in-house.
Ryan defends County Prognosticators
William Ryan, Chair of the Westchester County Board of Legislators, disputed WPCNR’s impression that White Plains (sales tax) budgets were on the money each year, and appeared better projected than the county seems to be doing. Ryan said the projections the county makes rely on economic forecasts by major financial prognosticators. (He did not name the firm). He said WPCNR was wrong in suggesting the county was overly projecting, that I did not know what I was talking about. He challenged WPCNR “to show me the figures.”
For the last four years according to the City 2007-2008 budget, page VI-30, White Plains has exceeded its sales tax revenues received projection by 9-1/2% in 2003-2004; 8.57% in 2004-2005; 2.34% in 2005-2006 and in 2006-2007 had a $2 Million surplus, a 5% increase over projected sales tax. It missed its sales tax target by 3% in 2002-2003 and by 3/4 of a percent in 2001-2002. Slightly more “on target” than the 40% miscalculations in the 2006 and 2007 county sales tax projections.
Oros Says Sales Tax Shortfalls are filled by sales tax surpluses from previous budget years
Oros blamed the county shortfall in sales tax projections on a policy the county has adopted of being optimistic on sales tax projections in order to save tax payers money and keep programs going without cutting them. He said that surpluses from previous years (based on the overprojection) pay off any shortfall. Oros said when sales tax projections are not met, Mr. Spano’s answer is to increase taxes the next year rather than cut spending. “My answer is you cut the budget, ” Oros said. Oros said the county had to have a balanced budget every year.
Ms. Reasoner said in the news conference, the county currently has about a $30 Million undesignated fund balance.
In other budget decisions, there will be a 25-cent increase in the bus fare to $1.75. This new fee will only pay 36% of the cost of operating the bus service.
There will be a 3 percent increase in funding to various contract agencies providing social services and health and cultural programs.
The budget increased funding for day care, dropping to 10% the required parental Co-Payment and increasing “subsidized day care slots” by 296.
The county is increasing funding for supervising the county elections process by $1.6 Million with purchasing of new election machines (awaiting a state decision on which machine to use) still to come when Albany decides that issue.
Cost of commuter parking permits at the County Center is being increased an additional $120 a year
Golf fees are being increased by $1.
Asked by WPCNR whether the County Executive, since this budget was described as “preliminary,” if he expected to make more cuts and where, the County Executive said , “No, no cuts.” Asked if he felt this was the best the county could do, he said “Yes.”
The budget goes to the County Board of Legislators next with their decision on the budget due December 27.
