Budget worries
Gov. Eliot Spitzer”™s proposed $124.3 billion budget would result in a shortfall of funds to at least three Hudson Valley counties. The lack of funds would be compounded by a drop in sales tax revenue, said representatives from Dutchess, Ulster and Orange counties.
Dutchess County Budget Director Valerie Sommerville said that contrary to the governor”™s claim that his proposal would bring in $519 million more to counties across the state, it could result in a $2.6 million shortfall for her county in 2008. The impact would also be felt in 2009, with a $2.9 million shortfall, she said.
Sommerville said the budget would shift some state costs to the county, including money needed for social services, youth detention costs and funding for county highways and the community college.
Total appropriations for the county”™s 2008 budget are $394 million, which includes $39.5 million for Medicaid, an increase of more than $2 million. Last year, the state Legislature passed a law that caps counties”™ payments to the state for Medicaid at a 3 percent annual increase, but the increase in Dutchess is below the cap. Dutchess”™ 2008 budget also allows for an 11 percent increase in utility costs.
Under the governor”™s proposed budget, the county would also have to pay $22 million to the state-mandated Preschool Special Education Program, which funds services for special-needs children, such as speech therapy. The state caps the counties”™ cost, but this has no impact on Dutchess since its increase is below the cap. Sommerville said unfunded mandates in the Department of Social Services total an additional $5.7 million for 2008 and 2009 combined.
“The state hasn”™t provided relief for these mandates, so taxpayers will absorb the cost,” she said, adding that “the solution is that the state should pay for programs it puts in place.”
Sommerville said the county has budgeted a 12 percent decline in mortgage tax revenues for 2008, for a total of $6.9 million. The county”™s first 2008 payment from the state for sales tax was $4.1 million, $400,000 less ”“ an 8.3 percent decline ”“ from the amount a year ago. Sales tax is the single largest source of revenue for services, followed by property tax, Sommerville said. If the negative trend in sales tax continues, Dutchess could end up with an $11 million shortfall by the end of the year, she said.
Sommerville said the county could save $2.6 million by not filling staff vacancies and eliminating some new hires,“on a case-by-case basis.” Late last year, County Executive William Steinhaus implemented an across-the-board hiring freeze.
Rich Mayfield, spokesman for Orange County, said sales tax revenue is coming in $3 million less this year. Out of the total county budget of $630 million in 2007, about $166 million was sales tax revenues. The county has budgeted $2.5 million less for 2008, Mayfield said. “Historically we”™ve had an increase in sales tax, but last year the trend started softening, so we cut our sales tax revenue projection.” Total budget for 2008 is $650 million.
Mayfield said under the governor”™s proposed budget, “the county share for public assistance has increased by two percent,” amounting to $550,000. “We have serious reservations about the budget as proposed,” he said. The county nursing home would lose $1.4 million under the proposed budget, he said.
To make up the shortfall, the county has cut its department head budget by $9.8 million. “We look for enhanced revenue streams from grants or other programs. Travel expenses get cut, a vehicle doesn”™t get purchased,” Mayfield said.
Ulster County Administrator Michael Hein said the governor”™s proposed budget would negatively impact his county by $1.5 million. The county”™s overall budget is $325 million. He said the 3 percent increase in Medicaid is “clearly significant,” resulting in a $1 million increase annually for Ulster. “The Medicaid cap has lowered the rate of increase, but it has not eliminated the massive burdens placed upon the counties,” Hein said. New York is only one of four states that require a county contribution to Medicaid, he said; of the four states, New York requires by far the largest contribution, at 25 percent.
Hein characterized the proposed budget as “the beginning of a process. We expect when the budget comes out, it”™ll go through different incarnations.”
“We absolutely have concerns about the sales tax and whether the levels are there,” Hein said, although he said it was too early to provide a number. “We”™re looking at all the options to protect property tax payers. It will involve an effort on all levels of government, because the taxpayers are simply overburdened.”