Suffolk's top fiscal analysts project budget shortfall of up to $89M for county

Suffolk's top fiscal analysts Monday  projected that the county faces a potential shortfall of between $80 million to $89.3 million heading into the 2020 budget deliberations.

But the county executive’s top budget aide, Eric Naughton, said that gap is far narrower than the $120 million shortfall the county faced this time last year and expected new revenues not included in the estimates. Those include internet sales taxes and Suffolk OTB casino revenues, which could ease county fiscal problems substantially, he said.

Robert Lipp, director of the Office of Budget Review and Naughton, deputy county executive for finance, gave the early assessment for the years  2018 to 2020  before the legislature’s  budget and finance committee in Riverhead. The forecast is the start of the annual process of putting together the county’s nearly $3 billion operating budget that Suffolk County Executive Steve Bellone will present in mid-September.

“It’s much better news than last year but there are some challenges we still have to work through,” said legislative Deputy Presiding Officer Rob Calarco (D-Patchogue), chairman of the budget committee. 

However, Legis. Tom Cilmi, head of the GOP caucus, said, “I take the presentation with a grain of salt” because Bellone’s 2019 budget was purported “to be balanced and obviously it’s not.”

Lipp said the three-year projected shortfall in the general fund is $65.3 million and $24 million in the police district, for a total of $89.3 million. Naughton said his $80 million estimate is "in the same ballpark.”

He said the bulk of the 2018 shortfall was due to the legislature not agreeing to allow the use of $32 million from the tax stabilization reserve fund to balance the 2018 budget, which would have been repaid this year.

Naughton also said the county had to pay the state the $10 million for the health department’s program to aid disabled pre-schoolers up to age 5, for prior years' rate increases that the county “didn’t catch up with.”

But Naughton called that forecast the “worst case scenario” and there are other factors that narrow the gap. While not included in the forecast, he said the county is likely to see $25 million in additional funding in the coming year from Suffolk’s OTB’s casino, Jake’s 58 in Islandia, and another $10 million this year, and as much as $25 million in sales tax revenue from out-of-state internet sales.

Naughton said the 2020 budget will be balanced, saying the county has ended borrowing from the state pension fund to pay retirement costs and expects police overtime costs to decline. However, he acknowledged that overtime in the sheriff’s office remains a challenge and the county may face costly litigation, alluding to the recent exoneration of Keith Bush,  whose murder conviction was vacated last month by a Suffolk judge after he served more than 30 years in prison.