Islip Town to vote on layoffs to close $10M budget gap

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The Islip Town board is scheduled to vote Tuesday on a resolution to lay off as many as 97 employees - more than 10 percent of the workforce - because of an anticipated $10-million budget gap in 2010 caused by plummeting mortgage tax revenue and interest earnings over the past two years, town officials said.

Without the proposed layoffs - which touch more than a dozen departments and call into question the future of the Islip Art Museum - the town would have to raise property taxes next year by 25 percent, said Islip Supervisor Phil Nolan, who is seeking concessions from the town workers' union that he said could save some of the jobs.

Though most Long Island towns are reporting drops in mortgage taxes this year, Islip would be the first to respond by eliminating full-time jobs. Some towns have eliminated part-time positions, imposed a hiring freeze or obtained union concessions in an effort to stave off full-time staff reductions.

Brookhaven Supervisor Mark Lesko said the town has done everything possible to avoid layoffs. "The unfortunate reality is if you were to lay off workers in this [economic] environment, you're going to lay off blue-collar workers who are going to go on unemployment . . . and that's a tragedy," he said.

Islip's revenue from the mortgage tax has dropped from $26 million in 2006 to $11.8 million in 2008 and a projected $7 million this year - $3 million less than budgeted, Nolan said, even as the town expects a $1.2 million shortfall in interest earnings.

The town has drawn from its reserves, but those unallocated funds have now shrunk to an estimated $2.2 million, a level that officials consider irresponsible to tap further, Islip comptroller Joseph Ludwig said. He noted that the figure is preliminary because a town audit is not complete.

Ludwig said Islip's financial crunch is particularly acute because of the way the town has used the mortgage tax revenue and reserves. The town regularly plowed huge mortgage tax surpluses into its reserve fund, he said, and in turn relied heavily on the reserves to supplement the next year's budget. But when mortgage tax revenue plummeted, the reserves dried up and the town's annual budget was no longer sustainable.

The proposed layoffs would compensate for about $8 million of the anticipated $10-million budget gap, he said.

Richard Hendershot, vice president of the town workers' union, Teamsters Local 237, disputed the comptroller's assessment, saying the town's reserves remain sufficient to help offset declining revenue.

"We don't think that this is a financial crisis," he said. "We're willing to sit down and discuss all of these options, but you can't put a gun to my head."

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Hendershot and Councilman Steven Flotteron, the board's only Republican, criticized Nolan's proposal, noting that the layoff list includes longtime employees and that the town has made several recent hires.

Nolan countered that the town has reduced its workforce through attrition by about 100 workers, to 865, since he took office in 2006. And with other measures already taken, he estimated the annual savings would total $15 million.

"These are cataclysmic economic conditions," he said. "We have done as much as we possibly could. The longer you wait, the deeper the cuts have to be."

He said the town also plans to eliminate 39 vacant positions.

The resolution on Tuesday's town board agenda lists 97 positions, four in management and 11 part-time.

Nolan said the town animal shelter will not close despite the proposed elimination of eight jobs. The list includes the full-time staff of the South Shore Nature Center and the entire staff of the Islip Art Museum.

With Patrick Whittle

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