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Suffolk surplus could total $500 million over two years, budget officials say

Officials in the office of Suffolk County Executive

Officials in the office of Suffolk County Executive Steve Bellone and the legislature's budget review office forecast large budget surpluses over the next two years. Credit: Morgan Campbell

Suffolk County budget officials on Tuesday projected the county will have "historic" surpluses totaling about $500 million over the next two years, as federal aid and high sales tax revenues buoy county coffers.

The county’s general fund surplus is expected to swell to between $492 million and $547 million in 2022, according to budget officials in the county legislature and County Executive Steve Bellone’s office.

The projected surpluses will put the county on its best financial footing in years and present elected officials with an opportunity to make "good government policy decisions," said Lance Reinheimer, director of the legislature’s Budget Review Office.

"This is a unique time, and it’s an exciting time," Reinheimer said. "In the past, we were trying to balance budget deficits, and now we’re trying to figure out what are we going to do with the surplus."

Budget Review said the projections foreshadow "historic high surpluses," said Jacqueline Routh, spokeswoman for the legislature.

County Budget Director Connie DeGiovine warned the financial outlook could dim if another COVID-19 surge occurs.

"We’re living in a time of uncertainty. We really have to think about what to do to put us on firm ground and build up our financial structure," said DeGiovine, whom Bellone appointed after former county Budget Director Eric Naughton stepped down last month.

Although DeGiovine argued for more conservative spending and budgeting practices, she remarked, "Regardless, it’s a huge, huge surplus."

Total surpluses were calculated by tallying up expected year-end fund balances for 2020, 2021 and 2022, officials said.

The projections released Tuesday represented a "180-degree difference" from those issued last year as the coronavirus pandemic spread, said Legis. Jason Richberg (D-West Babylon), legislative Budget Committee chairman.

Last summer, budget officials had estimated deficits of about $800 million through 2021 and up to $1.5 billion over three years.

"I didn’t think that the light at the end of the tunnel would be the next year," Richberg said of last year’s projections.

Bellone was able to avert $70 million in planned county spending cuts after Congress passed the $1.9-trillion American Rescue Plan in March, providing Suffolk County with $284.5 million in aid through 2022.

In 2020, Suffolk received $287.4 million under the U.S. CARES Act, which helped the county end the year with surpluses of $96 million in the general fund and $24.5 million in the police district, which covers the county's five western towns, according to the legislature's Budget Review office.

Nassau ended 2020 with a $75 million surplus, Nassau County Executive Laura Curran has said.

Maurice Chalmers, director of Nassau’s Office of Legislative Budget Review, said he expected Nassau to have a surplus this year.

DeGiovine said Suffolk‘s surplus projections through 2022 result largely from higher than expected sales tax revenues.

Sales tax receipts beat estimates by $100 million in 2020, and are up 29.5% so far this year compared with the same period last year, officials said.

Sales tax revenues will exceed the 2021 adopted budget by $341.5 million if there is no new COVID-19 wave, the Budget Review office said.

Budget Review is projecting a sales tax revenue increase of 18% compared with 2020, while Bellone’s office is projecting a 10% increase.

The Bellone administration's estimates are lower because officials factored in the potential for another COVID-19 wave and the prospect of reduced consumer spending when higher unemployment benefits and other pandemic aid ends, DeGiovine said.

Sales tax revenues have risen with the easing of pandemic restrictions, as shoppers celebrate with "revenge spending" to make up for lost time during the pandemic, Reinheimer said.

DeGiovine also cited the effect of federal government stimulus checks, a moratorium on evictions and pauses in student loan payments.

Legis. Tom Cilmi (R-Bay Shore), budget committee vice chairman, cautioned that expected surpluses were from "one-shot" revenues that likely won't recur.

, projected general fund surpluses are:

2020: $96 million

2021: $353 to $365 million

2022: $492 to $547 million

In the police district, surpluses are projected to be:

2020: $24.4 million

2021: $38.6 million

2022: $21.57 million

Sources: Suffolk County executive budget office; Suffolk County Legislature Budget Review Office

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