Following a report on Tuesday that the county's long-term fiscal outlook is even worse than previously imagined — a gaping $530 million hole through the 2013 budget year — County Legislator said many people are working on mitigation plans, "and not all of them are painless."
County Executive Steve Bellone, who commissioned the independent panel responsible for issuing the report, declared a fiscal emergency in Suffolk County before Tuesday was over, and said that he planned to meet with legislators and union leaders on Wednesday to address the shortfall.
The task force presented its findings Tuesday in front of the County Legislature, saying it found that both the county executive's budget office and the legislative budget review office had underestimated expense increases and overestimated revenues.
The panel also found that Suffolk County finished 2011 with a $33 million shortfall, its first budget deficit since 1992. Add to that a $148 deficit expected in 2012 and $349 million in 2013, and that brings the county's deficit over three years to more than half a billion dollars.
"The truth is worse than any of us could have imagined," said Bellone, D-Babylon.
Schneiderman, I-Montauk, said Bellone made the right move in declaring a fiscal emergency, and thus encumbering 10 percent of every county department's budget. “That is absolutely the right thing to do, but we all know more has to be done,” he said.
In recent budgets about $100 million in nonrecurring revenue has been found each year to close gaps — an unsustainable practice, Schneiderman said. “It's going to be tough to come up with another $100 million in things you can sell, things you can liquidate.”
He said it was important to the previous county executive, Steve Levy, not to raise taxes, whether it be because he wanted to be re-elected, wanted to run for governor, or just because he thought it was the right thing to do.
"But to get to that point, we forward a lot of money from the future to the present," Schneiderman said. “There are other ways to hold the line on taxes.”
According to the legislator, the county's woes started when the recession hit in 2009 and $100 million in anticipated revenue from sales tax was lost. "We started borrowing against the future,” he said.
But Levy said in a memo he circulated on the eve of the task force's presentation that he rejected several one-shot budget fixes advocated by the Legislature, including digging into the tax stabilization fund and tobacco settlement money and selling county facilities to then lease them back.
Levy said he called for recurring savings, such as closing the Foley Nursing Home to a private operator, but the Legislature refused.
Schneiderman noted that the $530 million isn't a budget hole quite yet — "it's a projected hole."
To fill the budget gap, Schneiderman foresees changes happening on both the revenue and expenditure side — and he insists on starting with expenditures. Though, he admits, it will be difficult for the county to make substantial cuts and still function.
"The first conversation is, 'How much can we shrink county government by?'" he said. "And once we have done that — and we can convince the public that we are bare bones — then I think we can have the conversation about revenue."
Schneiderman said that with the union concessions that are on the table, such as workers contributing more toward their health care costs, the county would be lucky to save $20 million annually, leaving a long way to go. He said he does not see layoffs as a feasible path toward eliminating the projected deficit, as many county departments are understaffed as it is.
County departments have been subjected to very Draconian cuts over the last few years, he said. While the Legislature can attempt deeper cuts, "I don’t see a lot of saving there,” he said.
The legislator said he favors right-sizing and right-staffing the county government, and having an honest discussion about what that costs. “We must have enough revenue to deliver the services we’re required to deliver and the public expects,” he said.
On the revenue said, raising the county sales tax to match New York City's rate would bring in $70 million in revenue annually, according to Schneiderman. He said the hike would be just 0.025 percent, and he wants to exempt certain purchases, such as clothing less than $50.
"The last time they had a shortfall like this, they did raise sales tax, but they raised it a whole percent," he said, also pointing out that the state would need to sign off on the county raising its sales tax.
As for raising property taxes, Schneiderman unequivocally stated, "Not gonna happen."
County property taxes have not gone up in the nine years he has been in the Legislature, and were they to jump now by 10 percent the hike would only bring in $5 million annually, he said.
"It's bad for real estate; it's bad for people struggling to make their mortgages," Schneiderman said. "It really concentrates the burden on a small number of individuals who are already struggling with high taxes.”
Higher fees and fines and more red light cameras are other revenue generating options he said the Legislature should look at, though he said they would be unpopular with the public.