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Year-End Surplus and Healthy Fund Balance Will Prove Essential in Preparing for Coming Challenges in Restarting Dutchess

Published: 5/4/2020

For More Information Contact:

Colleen Pillus, (845) 486-2000

Poughkeepsie… Dutchess County Executive Marcus J. Molinaro announced the County’s 2019 year-end financial report, which demonstrates the continued success of Dutchess County’s conservative fiscal management, has been sent, as required, to the New York State Office of the Comptroller on time, overcoming the challenge of working remotely and amid continuous response to the coronavirus pandemic. Dutchess County Government’s general fund ended 2019 with a surplus, as income exceeded expenses, and maintained a healthy fund balance. Dutchess County’s strong local economy helped bolster sales tax revenue, which increased by more than $9 million in 2019.    This strong financial condition will be essential as the County continues to respond to the COVID-19 pandemic and the related economic impacts.

“In Dutchess County, like other counties and states in the nation, we are navigating uncharted fiscal waters,” County Executive Molinaro said. “As we submit our 2019 Annual Financial Report to New York State, we are proud of our accomplishments, strong fiscal management, smart cash flow decisions, and conservative fiscal policies that have allowed us to deliver a magnitude of services, while well-positioning us to help manage this crisis and provide stability to our residents.”

Highlights of the 2019 Annual Financial Report include:

  • 2019 revenues totaled $472.6 million, creating a surplus as expenses totaled $471.2 million. 
  • Revenue increases included:
    • Sales tax receipts increased by $9.1 million, an increase of 4.6% compared to 2018;
    • State aid increased $8.7 million due to increases in partially funded mandated programs and a one-time increase in the County’s foster care block grant. Additional revenue from the State resulted from the Department of Community and Family Services (DCFS) discovering a state-wide error in how the State funded past settlements.
  • Expenditure increases included:
    • $1.7 million increase in sales tax growth revenue sharing payments to local municipalities;
    • $1.8 million increase in funding support for Dutchess Community College; 
    • $2.7 million cost increase for state-mandated pre-school special education programming,
    • $7.6 million increase for the DCSEA union contract settlements, DCFS positions, employee benefits and debt service; and
    • $3 million increase in mandated expenses for family assistance and safety net costs.
  • The 2019 fiscal year ended with $56.9 million in general fund unassigned fund balance, at the mid-point of the County’s desired range of 1-2 months of operating expenses (a range of $38 million to $79 million.)

Dutchess County’s solid fund balance is critical to managing and adjusting to external financial impacts on the County budget and finances, such as the coming challenges of “Restarting Dutchess” amid economic uncertainty caused by the COVID-19 pandemic.  

Since the pandemic first arrived in Dutchess, the County has taken several proactive steps to transform how departments deliver services to keep employees and residents safe and has worked closely with community partners to ensure they have the resources necessary to deliver essential programs and services. Spending restrictions were also put in place to mitigate the potential economic impacts, including:

  • Suspending vacant positions and considering requests to fill essential worker positions only on a case-by-case basis.
  • Postponing all non-essential travel and training.
  • Delaying all non-essential spending.

Dutchess County is also closely monitoring the possible impacts of the State’s 2020-21 Budget, and its projected deficits, as State revenue supports 16 percent of the County’s 2020 adopted budget.

County Executive Molinaro said, “We are facing very real pressures as our economy is impacted by the mandated closure of non-essential businesses to flatten the curve of the coronavirus pandemic, and those pressures will only increase as the State grapples with its own budget deficit.”

The State’s 2020-21 budget contains many changes that will impact the functions, programs, and services provided by the County and includes a provision that gives unilateral authority to the Governor to make appropriation and aid reductions if its financial plan is out of balance by more than one percent, or $1 billion. Following its recently released financial deficit projections, the State will likely propose reductions, but it is not yet known when those reductions will be proposed or to what extent they will impact county governments.

County Executive Molinaro continued, “Until we have more information, a better projection of this pandemic’s direct impact on County revenue, and a firm understanding of the proposed State aid reductions as well as possible Federal aid relief, making decisions or implementing sweeping cuts to the programs and services our residents rely on is premature.”

The County has also been advocating for the federal government to provide direct support to counties with populations fewer than 500,000 for revenue loss replacement.

County Executive Molinaro has formed a Fiscal/Financial Team that will focus on monitoring the economic impacts, State aid reductions, possible Federal relief, cash flow, and revenue maximization as part of the County’s recently announced “Restarting Dutchess” economic reconstitution initiative.

“We are living through unprecedented and uncertain times,” County Executive Molinaro said. “I am grateful to Dutchess County department heads, local elected officials, and the numerous community leaders who have stepped up to overcome this challenge. We will continue to monitor the situation and stand ready to make necessary adjustments to keep County Government and our community strong and vibrant now and into the future.”

The full 2019 Annual Financial Report and accompanying fiscal update memo are available on the County’s website (.pdf).