Poughkeepsie… “We are in the midst of the most challenging budget and financial circumstances I have experienced anytime in my 30 years of service in Dutchess County Government,” said Dutchess County Executive William R. Steinhaus during an emergency meeting of department heads held last week.
County government faces serious financial challenges of declining revenues, mandated and non-discretionary spending and the continuing damage from the overall economic downturn. “We didn’t look for this financial crisis, but it has found us,” said Steinhaus.
Spending projections from all county departments and elected officials for the 2010 fiscal year total $425 million. However, revenue projections indicate there will only be an estimated $375 million available to spend on all programs and services next year, creating an unprecedented budget gap of an estimated $50 million.
“There are only three ways to close this huge, gaping hole in the County’s 2010 budget: increase revenues through higher taxes; get relief from the oppressive burden of state mandates; and/or a reduction in spending for services,” said County Executive Steinhaus. “A county property tax increase is a bad idea, and unfortunately, we continue to receive additional mandates rather than relief from Albany, so cutting spending on services is the only real option remaining.”
Steinhaus discussed the practicality of each option:
X Increase revenues from higher property taxes. “In this economy, where residents and businesses are already struggling with their own shrinking budgets – it is not a viable option to consider a county property tax increase.”
X Mandate relief. “State and federal mandates imposed on county government remain our biggest budgetary burden. Until our state senators and assembly members make real changes to how the state handles its finances, county governments remain shackled with their costly mandated services.”
✓ Cut spending. “Just as families have had to make tough choices in their own personal finances, so must county government. There are a lot of probable, painful cuts in services coming, but we are all in this together and know we cannot continue ‘business as usual.’”
To close the $50 million budget gap, the initial budget submissions from each department and elected official have been returned to them to be completely reworked for resubmission. Each department must cut its overall county spending and property tax impact by restructuring and realigning their 2010 work plan. “The challenge for each and every county agency is to restructure its organization and prioritize its services, knowing services will have to be reduced. As much as Legislators will not want to have to cut programs and services, the money simply does not exist,” said County Executive Steinhaus.
Any private business or government that has to cut back must, by necessity, go to its largest cost centers and areas of increasing expenses. For county government those cost centers are the Sheriff’s Office and Jail, Health and Human Service departments and the Board of Elections.
Sheriff’s Office and Jail Sheriff Anderson’s initial 2010 spending plan totaled $45.6 million net to county cost, a 15% increase over his 2009 adopted budget. The Sheriff has now been allocated $36.6 million for his 2010 work plan, which is all direct net cost on the property tax levy.
Health and Human Services departments must cut nearly $15 million in total spending to achieve $7.6 million in net to county savings from the property tax levy. (These departments are highly reimbursed by state and federal dollars.)
Board of Elections’ Commissioners Knapp and Gamache are seeking $4.4 million for 2010 spending. BOE expenses under Knapp and Gamache have grown more than 400% from $874,000 in 2005 to a startling $4.4 million just five years later in 2010. The Board of Elections has been allocated $2.3 million for 2010, all of which is direct net cost on the property tax levy.
County Executive Steinhaus recently sent communications to local municipalities and school districts notifying them of potential budget proposals including the option to purchase discretionary, non-mandated sheriff road patrol services, the option to purchase discretionary, non-mandated school resource officer services and returning to the sharing of election expenses, which municipalities had always done prior to 2006. These restructuring alternatives and resetting of service priorities are available to Sheriff Anderson and the Board of Elections to factor into their work plans as they bring their budgets inline with the revised 2010 funding realities and to match available tax revenue.
While the Sheriff’s Office and Board of Elections can implement different policies to distribute costs to those who utilize their services; many other departments, notably the Health and Human Services departments, are mandated by federal and state law to provide costly programs and services, without any ability to change the policies. “Many of our departments continue to struggle under the crushing weight of paying for state mandates,” said Steinhaus.
Expenses are rising dramatically for mandated programs. Some of the projected expense increases for mandate programs delivered by the County’s Department of Social Services include:
- Children’s Services Committee for Special Education (CSE) Placements are projected to rise up to 25%.
- Institutional Care Placements are projected to rise 15%.
- Temporary Assistance for Needy Families (TANF) costs are projected to rise by as much as 25% in 2010 as economic conditions will continue to increase demand for these services.
Additionally, the news about New York State finances continues to worsen as each week goes by, with Governor Paterson now reporting that state revenue is down by more than 35 percent and the state is facing a budget gap this year of up to $3.5 billion. This is an ominous sign for county governments who have historically seen the state increase mandate demands. The County has no discretion with any of these state mandated programs or the imposed costs.
“We all have huge challenges in front of us as we try to find a balance between what services county government must provide, what county government wants to provide and what county government can afford to provide,” concluded Steinhaus. “There are no easy answers, but I am confident all county elected officials and department heads will join with me to create a budget that limits county taxes for our homeowners and businesses. If that requires making tough choices, that’s what our property taxpayers expect from all of us to balance the 2010 budget.”