2004 Budget Message
November 1, 2003
To Bradford Kendall, Chairman Dutchess County Legislature; Members of the Dutchess County Legislature; and the Residents of Dutchess County
I present to you today the Tentative Budget for Dutchess County for the Year 2004. The message embodied in the document is clear; the ever-increasing bill for Albany-imposed mandated cost increases continues to outpace Dutchess County’s ability to pay.
In a September 2003 special report entitled New York Counties Remain Fiscally Challenged, Moody’s Investors Service noted:
“Counties in New York are distinguished by the following factors:
County officials from around the state agree that Albany mandates have broken the financial backs of counties in New York State. From the five counties of New York City north to Clinton County, and from the tip of Suffolk County all the way west to Chautauqua County, New Yorkers are paying higher local property, sales and other local taxes and receiving reduced services for their money.
Decisions on the 2004 Tentative Budget for Dutchess County before you will actually be driven by three Albany-imposed mandated costs: Medicaid, pension system costs and other human services programs.
The cost to Dutchess County residents for the New York State Medicaid program which increased $9.5 million this year over 2002 will leap at least another $5 million next year to now total $48 million, a startling 85¢ of each dollar of the 2004 tax levy. The bill for Medicaid and other Albany-imposed mandated human services program costs will skyrocket approximately $10 million over this year’s modified budget.
The State Public Employee Retirement System will send Dutchess County taxpayers a bill for more than $11 million next year, $7 million more than this year’s bill and $10 million more than the 2002 bill to pay for Albany’s benefit enhancements, including reduced employee contributions to the system, and investment losses.
Meanwhile, total state and federal aid is projected to increase a mere $1.7 million next year. Albany believes the difference, driven by their policies, should be borne by our local residents.
Following months of difficult work by the administration, total spending is held in the Tentative 2004 Budget at $339.4 million, and the percentage of growth over the 2003 modified budget has been scaled down to only 4.8% in spite of the $17 million in new spending for state mandates. The Albany-imposed mandated cost increases will still force an average county property tax increase of 4.59%. The increase will cost the hypothetical “average” owner of a home assessed at $150,000 only an extra $17 next year, going from approximately $371 to $388. Due to state set equalization rates in localities, some will be lower and some will be higher. Even with the additional amount to be raised by property taxes, however, I am proud to say the seven tax cuts enacted during my tenure as County Executive have helped keep the property tax levy for the Dutchess County government share of the property tax bill still below the 1989 level. County property taxes are the smallest of the three major property taxes, including schools and towns/villages/cities, and therefore, represent only approximately 13% of the average bill for all land taxes.
The alternative to the very minimal proposed property tax increase is to reduce services controlled by the county below acceptable levels. I rejected the option of eliminating sheriff patrols, cutting essential services to seniors, or damaging critical services to children and families. We have again streamlined service delivery systems and will continue to do so. However, we have worked exhaustively not to propose program reductions that cut into the fabric of our community or undermine the quality of life enjoyed by Dutchess County residents.
The Tentative Budget before you maintains all essential services and does not call for the laying off of our highly valued county employees who provide those services. It does, however, reduce the county workforce by a net of ten from staff positions I have held vacant. It is important to emphasize Dutchess County Government still employs fewer people today than it did a decade ago, although our mission is greatly expanded. Ours is a very lean government which depends greatly on the ingenuity and hard work of its managers and employees. To assume our county government workforce can be reduced further without impact would not be responsible. There is little question doing so will reduce the delivery of programs and services to an unacceptable level. Therefore, I also rejected layoffs as an option to avoid the minimal tax increase.
I believe Dutchess County is rich in available services for the residents of our community. I will continue to support services which supplement but do not duplicate county government services which are our traditional core mission. Furthermore, I will do that so long as the taxpayers’ investment realizes achievable, measured and effective results for us. Therefore this budget reflects my strong commitment to maintain and preserve important community services provided for the arts, tourism, environment, economic and workforce development, veterans, our working poor and homeless, as well as women and children at risk resulting from domestic violence or abuse.
My 2004 Budget actually increases funding to $350,000 for our Children’s Health Initiative to teach children the health risks associated with tobacco use, expands our programs to monitor and control West Nile Virus and provides more than $600,000 operating support to the Dutchess County Water and Wastewater Agency to help ensure the availability of clean water at an affordable price and continue to assist local communities to assess water quality and supply issues.
I also plan to press forward to continue to implement our initiative to enhance our emergency services and law enforcement community’s ability to respond quickly to emergency cell phone calls. Therefore, additional staff resources and equipment is provided to our 911 Center for that purpose. Receiving cell calls at our 911 Center will be a significant safety net for residents and visitors to our County.
My 2004 Tentative Budget reflects the impact of the slowdown in state aid reimbursements as well as reductions and our reliance on fund balance as highlighted in the Moody’s Report mentioned above. Those same pressures will continue next year as well. We must keep in mind the very significant drawdown of fund balance this October to pay the Albany Medicaid bill. This is coupled with the drawdown of our reserves in the past few years for negotiated wage increases for our employees covered by labor union contracts. We are now at the point where we must stabilize our “rainy day funds” in 2004 and begin to replenish them in 2005 and beyond. For the long-term fiscal health of our county, my 2004 budget moves us in that direction.
I am optimistic about the prospect of growth in our national economy next year. Just this week I received an e-mail from the White House, announcing, “The American economy grew at a rapid pace of 7.2% during the third quarter of this year – the best since 1984.” I am also confident our very successful local economic development strategies and policies will help Dutchess County to continue to outpace the nation. I am cautioned in my optimism, however, by the urgency of the need to strengthen our reserves and the necessity to remain prudent both fiscally and programmatically in these times of population growth and economic expansion. I am neither optimistic nor confident, however, we will see fundamental change in the way Albany-mandated programs are financed. Without such change, Dutchess and all other New York State counties will remain hamstrung and our residents will continue to pay higher local taxes.
In closing, I wish to express my thanks to my entire Executive Office and Budget Staff, to all my Executive Department Heads and to the independently elected officials for their assistance, understanding, cooperation and support throughout the difficult process of developing the Year 2004 Executive Budget.
WILLIAM R. STEINHAUS
Dutchess County Executive