Brand: Bellone moves to tap 'rainy day' fund

Call it the Hauppauge two-step.

Last month, Suffolk County Executive Steve Bellone in his proposed $3.11 billion budget for 2019 called for the county to take money from its "rainy day" fund to cover a $32,166,550 hole in this year’s county budget and pay it back next year.

But a seven-Democrat majority on the county legislature's budget working group last week axed Bellone's proposal in one of three dozen changes to be considered when lawmakers meet Wednesday to amend Bellone’s budget.

In making his proposal, Bellone cited an unexpected $20 million in overtime costs in the police and sheriff’s departments. He also noted $11 million in added social service costs due to a cut in state reimbursements for some forms of assisted housing.

Jason Elan, Bellone’s spokesman, said the use of reserves “is consistent with accounting industry standards, and the legislature has approved such transfers in the past as part of the normal budget process.”

However, the legislature’s office of budget review in a report urged lawmakers not to deplete the tax stabilization reserve fund, as it's formally called. It contains $49.5 million, a figure that hasn't changed since 2011.

“What the budget does . . . is make 2018 look better and 2019 worse than they really are,” said the report. “If we reverse the recommended changes . . . the 2018 fund balance would go from a surplus of $1.2 million to a deficit of $31 million. The deficit is a more accurate description of 2018” and “more properly portrays” the county's fiscal position going forward.

Presiding Officer DuWayne Gregory (D-Copiague), head of the budget working group, said dropping Bellone’s plan to borrow from the rainy day fund, “is a better way” to make the 2019 budget more transparent. 

Legis. Tom Cilmi (R-Bay Shore), the minority leader, said Bellone was trying “to pull the wool over people’s eyes . . . in advance of his bid for re-election next year.”

Under state law, use of money from the rainy day fund can only be initiated by the county executive. The fund is aimed at helping officials avoid increases in the property tax levy exceeding 2.5 percent. The law provides for exceptions to allow the county executive to seek to use the fund to cover unexpected expenses or revenue losses. 

The only way Bellone, a Democrat, can keep the rainy day money in the budget is to defeat the entire package of changes, which keeps his whole budget intact. To do that, Bellone would need to get two Democrats from the party's 11-member caucus to oppose the amendment, which adds staff and funds for key projects.

Also, state law requires the county legislature pass a separate resolution to tap the rainy day fund. Passage requires a two-thirds vote, which means Bellone would have to get a Republican to go along.

Cilmi said the entire GOP caucus opposes raiding the rainy day fund. Bellone aides declined to comment on that strategy for keeping the plan alive.

Comptroller John Kennedy, a Republican, said the maneuver to tap the rainy day fund unmasks Bellone assertion in September that the county no longer had a structural budget deficit.

"It’s like three-card Monte," said Kennedy. "We’re ending 2018 $30 million in the hole because we ended 2017 $40 million in the red and the executive was unwilling to confront the ongoing structural problem. It sends a terrible message to the [bond] rating agencies."

Correction: The Suffolk County Legislature's presiding officer DuWayne Gregory (D-Copiague) opposes County Executive Steve Bellone’s proposal to use $32 million from the county’s tax stabilization reserve fund this year to plug a budget holes, and pay the fund back next year. Due to an editing error, Gregory's position was misstated in an earlier version of this story.