Rocky road for county budgets - Westfair Communications

Perhaps no county in the Hudson Valley presages the troubles looming for 2010 better than Dutchess County, where the county executive and the Legislature engaged in a rancorous budget battle to end 2009, with legislators overriding some of the line-item vetoes the executive cast saying the county could not afford them.

The situation may be similar in other counties most of which saw increased property tax levies while facing the same pressure to spend more on services even as sales tax revenues fall short of projections in 2009 and are scaled back for 2010. Meanwhile, state and federal aid has dried up.

With final passage of the budget and tax levy figures for 2010 by the county Legislature on Dec. 28, property owners in most Dutchess County towns will face a roughly 11 percent property tax increase in 2010 over 2009 figures. But the revenue will not be enough to prevent deep trouble and County Executive William Steinhaus predicts circumstances will force legislators to revisit the budget during the fiscal year.

“Clearly, based on the continuing national recession and the financial chaos in Albany, this county Legislature is going to have to make some hard decisions either early in the year, mid-year or at the end of year because they failed to make those decisions in approving this budget,” said Steinhaus. “And they have compounded the degree of difficulty they will face.”

His proposed budget called for $398.8 million in total spending up from roughly $396 million in the 2009 adopted budget. But the Dutchess legislature added back money he had cut and after an ongoing tussle that included an executive veto of numerous line items, most of which were restored by legislative override, the total 2010 spending is budgeted at almost exactly $400 million.

That is more than the county can afford, Steinhaus predicts.

Difficulties are likely throughout the Hudson Valley where most counties have sought to increase revenue through raising property taxes. According to figures provided by the New York State Association of Counties, Westchester County has total appropriations of $1.8 billion for 2010, up about 2.7 percent over last year and the property tax levy is rising by 4.8 percent.

In Rockland County, total 2010 appropriations of $708 million are just two-thirds of 1 percent greater than 2009, but the property tax levy is rising 4.7 percent. Ulster County has adopted a $349 million budget for 2010, which is down 1.74 percent from total 2009 budgeted spending, but which raises the property tax levy by about 3.5 percent.?In Orange County, $707.5 million in spending is roughly 5 percent higher than last year while the property tax levy was not increased. Putnam County appropriated $137.1 million, a 1/2 percentage point increase over last year, but the executive was able to reduce costs through drastic measures such as laying off budgeted positions to reduce the property tax levy by 4.7 percent from 2009 figures.

While those actions were taken during the relatively orderly process of creating an annual budget, many observers feel counties will not have the luxury of normal deliberative processes in dealing with shortfalls looming for 2010. Making changes is not unprecedented, according to Mark LaVigne of NYSAC (the New York Association of Counties), about 15 of the states 57 counties made major budget amendments during the course of 2009 and he expects that figure to grow in 2010.

Steinhaus said there are 17 counties with executives, including all the lower Hudson Valley counties save for Sullivan. He said those counties willÂ have an easier time marshaling the momentum to cut costs. “Many legislators, by culture, think they can put off painful decisions, but executives are always operating day to day,” said Steinhaus.

“Let”™s keep in mind, taxes are a function of spending philosophy and spending policy and what we”™ve got right now are county legislators who don”™t get that that spending has to be controlled better,” said Steinhaus. He said at both the state and local levels, legislators seem to have “a Santa Claus mentality.”

But he said “Once the budget is adopted and once the clock strikes midnight (Dec. 31),Â it becomes the executive”™s budget to administer.” He said that in the various counties the county charter specifies the procedure for modifying budgets and closing deficits, and he said in Dutchess it is a complex proceeding.

Steinhaus said many politicians still have not seemed to grasp the multifaceted depth of the budget crisis, with state coffers, education funding and city and town budgets all looking at major cost increases and the municipalities and schools facing major budget cuts. He said the cumulative effect is potentially devastating and will force changes.

“Its not just the county property tax, it”™s the layering of taxes,” said Steinhaus. “You have to view the overall impact of all taxes on residents and businesses. And we believe property owners are overly stressed.”

The year has just begun, he said, but many counties are facing shortfalls. “When those revenues don”™t come in, you will have a structural imbalance in the budget,” said Steinhaus. “When that will show up, on day one during the sixth month, I don”™t have aÂ crystal ball ”¦ but some time during the course of the year, there are going to have be some very, very difficult decisions made.”