Analysts urge sales-tax hike for Suffolk

Budget analysts warned that Suffolk County Executive Steve Budget analysts warned that Suffolk County Executive Steve Bellone's proposed 2013 budget is balanced on $210.4 million in one-shot revenue and savings, including the sale-lease back proposal, which would require state approval, as would a sales tax increase. (April 18, 2012) Photo Credit: Newsday / John Paraskevas

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Legislative budget analysts have urged Suffolk lawmakers to replace County Executive Steve Bellone's $70 million one-shot proposal for the sale-lease back of county buildings and instead seek a quarter cent sales tax increase to generate the same amount each year.

But elected officials Monday were cool to the idea.

Noting the county is already facing a $154 million shortfall for 2014, the analysts warned that neither a property tax hike allowed by the state's 2 percent tax cap nor increased sales tax revenue is enough to solve the county's structural budget imbalance.

"As much as the county endeavors to control expenditures, we have a need for recurring revenue to balance the cost of doing business," the Office of Budget Review stated in its 336-page report. "A quarter cent increase would generate $70 million and place it at a par with New York City sales tax rate."

In making their recommendation, budget analysts warned that Bellone's proposed 2013 budget is balanced on $210.4 million in one-shot revenue and savings, including the sale-lease back proposal, which would require state approval, as would a sales tax increase. "If the transaction does not move forward the county needs a plan B or 2013 budget could end with a significant shortfall," the report states.

However, the report also found that Bellone "has made the best of a bad situation," adding that Suffolk's fiscal woes are "so large that it would be unfair to think the recommended budget could solve them in one year."

Jon Schneider, deputy county executive, said the legislative report "recognizes we've made tremendous strides in the last year." But he questioned whether a sales tax hike is a realistic solution. "We have not received any information at this point that it is on the table in Albany," he said. "Our goal is to live within our means with the options available to us."

Presiding Officer William Lindsay (D-Holbrook) labeled the sale-lease back idea "voodoo economics," but acknowledged he had raised the idea last winter -- when the county had a $500 million gap -- to avoid layoffs. He added, however, that lawmakers do not have a way to replace the $70 million Bellone has included in the budget from sale-lease back.

Legis. John M. Kennedy Jr. (R-Nesconset) said he is "not ready to walk away" from the sale-lease back proposal since he was also one of the lawmakers who made the proposal earlier. He said the sale-lease back has to be done with departments that can get aid for rental costs.

He also said Albany officials up until now have opposed authorizing local sale tax increases. "I'm reluctant to express support for anything that is not within our authority to implement and is completely dependent on another level of government," he said.

Budget review's report also suggests the county expand on Bellone's budget proposal to borrow $37 million for five years to pay the correction officers' arbitration, and to bond for looming awards with a half-dozen other police unions, including the superior officers and detectives, most of whom have been without a contract since 2010.

That move would save $50.5 million in 2014, reducing the cost to $26.6 million. The report also cautions that even if those solutions are adopted, the county faces continued problems in staffing and delivery of services, higher costs from public safety contracts, expected cutbacks in state and federal aid, and higher pension costs.

They also warn the county's multiyear deal to sell revenue from a federal tobacco settlement will end in 2014, meaning that debt service payments will rise from $90.4 million to $122.8 million.The legislative budget analysts also projected a sales tax growth lower than the 3.85 percent forecast for 2012 in Bellone's budget and instead estimates a 3.4 percent growth this year. For next year, budget review projects 3.5 percent growth rather than the 3.75 percent Bellone anticipates.

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