Suffolk County Executive Steve Bellone’s proposed $3.05 billion budget for 2018 overestimates sales tax revenues, underestimates police pay and overtime and uses “risky assumptions” that could widen the county’s structural deficit to up to $150 million next year, legislative analysts said.
The Office of Budget Review’s 200-page report forecasts sales tax revenues for 2017 and 2018 to be $25 million below Bellone’s estimates.
Bellone also underbudgeted expenses for police salaries and overtime by $15.4 million and sheriff’s overtime by $5 million, analysts said.
Bellone said his new budget reduces the structural deficit to $30 million.
But legislative analysts said the gap could be as high as $150.3 million, when risky assumptions that may not pan out are included.
Bellone’s budgeting of $30 million in unsettled union concessions for health benefits are the “largest risk factor” in his spending package. Health-care costs are expected to rise by $44.3 million next year, analysts said.
In making sales tax projections, the analysts had the benefit of third-quarter revenues that came in lower than projected in Bellone’s 2018 budget, unveiled in mid-September.
At the time, Bellone proposed 4.66 percent growth in sales tax revenue this year, and a 2.83 percent rise in 2018. The legislative report urges that projections of the sales tax revenue increases be lowered to 3.84 percent this year and 2.63 percent in 2018.
Bellone spokesman Jason Elan criticized the legislature’s sales tax estimates. He said Budget Review’s consultant, Thomas Conoscenti and Associates, was last used in 2013, when the forecast was off by $27 million.
“We know of no other municipality using their services, but we do remember Mr. Conoscenti’s ‘Costco Index’ in which he projected sales tax based on how many people were on line at Costco,” Elan said. “Suffolk taxpayers can only hope his model has evolved since then.”
Robert Lipp, Budget Review director, said the dip in the third quarter means sales tax revenue would have to grow by an unusually high 6.39 percent for the rest of the year to meet Bellone’s projections.
“Recent history has shown that forecasting sales tax is far from an exact science,” Lipp said in the report. “That being said, at this point, one would be hard-pressed to expect sales tax revenue to come in on budget.”
Presiding Officer DuWayne Gregory (D-Copiague) warned that Bellone’s budget may have to be cut, including “pushing back the police class.” Bellone had recommended the hiring of 235 new officers through the end of next year.
“We’re just getting into it,” Gregory said. “It’s too early to say what programs we can save and what may go.”
“The budget proposed by Bellone is consistent with those of the past few years that have gotten us into this deep hole,” said Legis. Kevin McCaffrey (R-Lindenhurst), GOP caucus leader.