Suffolk County’s proposed $3.2 billion budget would create a nearly $20 million operating deficit by the end of 2020, according to the legislature’s Budget Review Office.
Legislative budget analysts say the projected deficit stems from imbalances in two county funds -- the police district and the general fund.
The police district and the general fund are projected to have combined deficits of $19 million by the end of 2019, even as property tax collections and other revenues have risen by hundreds of millions of dollars, legislative budget analysts said. The projection is contingent on Bellone's budget passing as is, although the legislature can amend it.
Bellone's 2020 budget projects revenues of $4.1 billion and expenses of $3.2 billion.
Budget analysts called Bellone's revenue projections overly "optimistic."
But Eric Naughton, Bellone’s budget director, said there would be no operating deficit at the end of 2020. Naughton called the BRO's projection of a $19 million deficit a "margin of error" in calculations, given that figure is less than 1 percent of the overall budget.
"I would just say their broadcast is probably too cautious," Naughton said of the BRO report, "and we feel that our numbers are on target and we're comfortable with what we projected."
Bellone aides recently projected a $9 million surplus at the end of 2020.
Naughton said the estimate derived from a reduction in the police district deficit from about $20 million to $11 million.
A legislative budget analyst cautioned that a reduction in the deficit is not the same as a surplus.
Bellone's proposed 2020 budget underestimates expenses and overestimates revenues, legislative budget analysts said.
In detailing the $19 million deficit estimate, the report said Bellone's spending plan does not factor in additional costs, including $5.1 million for expected court settlement payments, $6.6 million in police district personnel costs and $1.8 million in police overtime.
Another shortfall of $4 million is expected because the proposed budget does not comply with county law creating the public financing of campaigns, the report said. The budget allots only $1 million to public financing when it should allot $5 million.
The Budget Review Office report came after the state comptroller’s office found Suffolk County to be in the most fiscal stress of all counties in the state for the second year in a row.
Republican county Comptroller John M. Kennedy Jr., who is running against Bellone in November, said the county’s financial state “could not be more dire.”
“This budget and prognosis for us in 2020 really is like a patient that was on life support having the plug pulled,” Kennedy said Tuesday.
The proposed budget would increase property taxes by a total of $14.65 million, about $4.85 million less than allowed under the state tax cap, the Budget Review Office report found.
The police district, which covers the county’s five western towns, accounts for $607.8 million of the $700 million total property tax levy in the 2020 budget. East End towns largely provide their own police services.
Still, the police district will have an $11.3 million deficit by the end of 2019, the legislative report said. Police district salaries are expected to rise by $83.3 million by the end of 2024 after the administration reached a new agreement with the county Police Benevolent Association in May, the report said.
Legislative budget analysts also raised concerns that property taxes in the Southwest Sewer District would decrease by $2.14 million under Bellone's budget. The legislative budget office said the tax reduction, which would be the fifth in a row, could lead to less available funding for capital sewer projects, which could increase the need for borrowing.
Budget analysts said tax revenue is expected to grow by about 4.5 percent in 2020. Sales tax revenue in the third quarter grew by 5.5 percent, according to a report released last Friday, prompting BRO analysts to reduce initial projections of a $26 million shortfall.
But the county is facing rising costs, the report found.
For instance, the county payroll has increased by $315 million since 2012, even as the workforce declined by 1,250 positions.
Employee health-care costs will grow by $22.2 million in 2020 even as 10 county labor unions agreed this year to pay into their health care for the first time. The BRO projects a $10 million shortfall for employee benefits.