Suffolk County has a new $18 million budget hole.
And at least initially, county officials are largely at a loss to explain the cause, but are pointing fingers at one another.
What makes the number so startling is that the $18 million is missing from about $49 million in property taxes that were supposed to be collected in the general fund. That’s nearly 37 percent less than expected.
In the fiscal grab bag that is the county budget, the general fund is also where the shortfall in property taxes shows up for the police district, the two dozen county sewer districts, the community college and the district court — a group that levies a total of $635.5 million in property taxes.
Not only that, but all the unpaid taxes for school districts, towns, libraries, fire, ambulance and other special districts — where the overall levy totals $5.75 billion — also show up as part of the county general fund’s shortfall. That’s because the county, by law, must advance those levels of government for unpaid taxes upfront to keep them whole.
After three years, the county can recover delinquencies from late payers plus interest and penalties, or seize the properties from tax deadbeats and sell them at auction.
“The rate of delinquencies is certainly not good news,” said Robert Lipp, director of the office of budget review. But while the percentage of delinquencies could have remained flat, the amount of unpaid taxes may have gone up because total taxes levied increased, he noted.
Connie Corso, budget director, called the shortfall a “relatively serious number.” But she said it is counterintuitive to the state of the rest of the county’s economy because job numbers are up, foreclosures are down and homes sales are rising.
She also said initial year-end numbers for 2016 indicate sales tax receipts were $8 million higher than expected.
Aides to Democratic County Executive Steve Bellone say the county comptroller’s office provided budget aides with estimates of the level of tax delinquencies.
Vanessa Baird-Streeter, Bellone’s spokeswoman, said the comptroller “should look at the aggressive [tax-collection] campaign implemented by Barry Paul,” a Bellone aide who temporarily ran the treasurer’s office in 2015 before it was merged with the comptroller’s office.
Baird-Streeter said Paul sent strongly worded letters “with some teeth” to tax deadbeats, helping generate $5.7 million more in property tax payments than projected. She also said Paul sent letters to all those who were one, two and three years late on tax payments, while in 2016 Comptroller John M. Kennedy sent letters only to those in their first or third year of delinquency.
Kennedy said all estimates in Suffolk’s operating budget are ultimately Bellone’s responsibility.
Kennedy said his office not only sends letters, but calls deadbeats to encourage payment, and that the 2015 spike in payments was due largely to an improving economy. Kennedy said the Bellone administration should have lowered estimates of tax collections because the pool of delinquencies on which the county could collect had shrunk.
“In an improving economy you can’t sell . . . or refinance your house unless the taxes are paid,” Kennedy said. “They . . . bet on something wildly unrealistic.”