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News Release    

January 31, 2008      

For Further Information Contact:
Valerie Sommerville, Budget Director
(845) 486-2010

Dutchess County Government Prepares for Impact of State Budget, Current Economic Trends

Poughkeepsie… In a report to Dutchess County Executive William R. Steinhaus today, Budget Director Valerie Sommerville outlined how the proposed 2008-09 New York State Budget could impact Dutchess County and expressed caution about the impact of the softening national economy.

Along with County Executive Steinhaus and other senior staff members, Sommerville was in Albany on Tuesday for the New York State Association of Counties (NYSAC) budget briefing where over 800 county leaders from across the state gathered to get a better picture of how Governor Spitzer’s proposed budget will impact county governments.  “As we have communicated to County agencies over the past month, we have been anxious to gain a better understanding of the proposed state budget.   While we have learned more, we still face a great deal of uncertainty,” said Ms. Sommerville.   

According to NYSAC’s preliminary report Impact of the 2008-09 Executive State Budget on County Government, “Cuts in state aid and other changes result in an overall negative impact on counties from the proposed state budget.   Significant changes in state policy requiring counties to pay an increased share of welfare benefits and the full cost of local youth detention facilities alone will shift costs of approximately $76 million from the state to counties in the first year.”

Although Governor Spitzer has characterized his budget proposal as a $519 million positive to counties across the state, analysis by NYSAC’s staff, as well as the Dutchess County Budget Office, does not support the Governor’s representation.

Preliminary analysis show Governor Spitzer’s proposed budget shifts could result in a negative impact of more than $2.6 million for Dutchess County in 2008 alone.  The state’s fiscal year overlaps counties’ current fiscal year and next year’s.    Therefore, counties only have part of the year to recover from the impact of state actions.       “Since the final state budget will not be adopted until several months from now, there still remains significant uncertainty for counties across the state.  It would be irresponsible to ignore the potential impact until mid-year only to find out serious fiscal problems could exist.   We cannot spend money we don’t have,” said Sommerville.

Coupled with the proposed state budget impact, recently released reports show Dutchess County could be facing exposure on major revenue sources.    The Associated Press reported yesterday “the (national) economy deteriorated considerably during the October-to-December quarter, capping its worst year since 2002, as worsening problems in the housing market and harder-to-get credit made individuals and businesses more cautious in their spending.  In the fourth quarter, consumer spending slowed to a pace of 2 percent, down from a 2.8 percent growth rate in the prior quarter.” The report noted consumer spending showed the smallest increase since 2003.   This has prompted concern about the possibility of declining sales tax and mortgage tax revenues as consumers tighten their belts.
 
Sommerville’s report recommended cost containment measures in spending areas such as equipment purchases  and other categories to minimize adverse impacts to Dutchess County taxpayers.   Depending on the severity of the national economic downturn and the final state budget impact, added spending controls may be required.

Additionally, as the State has confirmed the stability of some funding streams, Sommerville advised that Executive Order #2 be amended as early as next week to allow the Budget Office to begin phasing in vacancy control approvals on a case-by-case basis.   Consideration would be given to tasks and services where there is deemed to be critical need or where there is substantial state aid reimbursement to offset the cost.       

 “Administering budgets is an ongoing, fluid process.  As always, we will need to continually evaluate current circumstances at a national, state and local level and take corrective measures as necessary,” said County Executive Steinhaus. “We are taking action to govern and plan in response to the current economic and budgetary situation in front of us today and managing circumstances not of our choosing.   We must be good stewards of county finances to anticipate what the future may bring so that we can prevent rather than react to any major fiscal impacts that occur, to ignore them would be irresponsible.   As we continue to face fiscal challenges, I am confident we will receive the cooperation and support of fellow elected officials, legislators, and our rank and file county staff,” Steinhaus concluded.

See REPORT (.pdf) regarding 2008-2009 State Budget impact.



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Last Updated: 2/1/2008