Levy, fiscal officials, split on shortfall

Suffolk County faces a two-year budget shortfall of $179.5-million and serious cash-flow concerns that could come this spring and at year's end, fiscal officials told lawmakers Tuesday.

However, aides to County Executive Steve Levy projected a smaller $140-million shortfall for this year and 2012.

County Treasurer Angie Carpenter and Comptroller Joseph Sawicki, meanwhile, warned that cash flow will be especially tight in April, when they expect to have only $1.6 million, and at year's end a negative cash balance is projected.

Sawicki cautioned those projections may force the county to do a revenue bond borrowing -- something Suffolk has not done since 1992 -- using unpaid state aid as collateral, as Rockland County recently did. Comptroller aides said Rockland paid 3 percent for the borrowing, three times the interest Suffolk paid for a $390-million borrowing for delinquent taxes last December.

All sides blamed the state for exacerbating the problems with delays in making aid payments that currently total $182.6 million. "It's not Suffolk's fault," said Sawicki. "It's mainly thanks to the state for being tardy."

Jeffrey Gordon, state budget division spokesman in Albany, said he could not comment without more detail on the county's claims, but added, "We'd be happy to work with them to address their issues."

Legis. Edward Romaine (R-Center Moriches), alluding to Levy's State of the County message last month, said that while the public was told "the state of the county is strong, the indications are quite the opposite."

However, budget director Connie Corso said Suffolk's fiscal position is far better than Nassau's and better than last year's, when the budget gap was twice as large. She added the budget office expects to take steps that will reduce the gap to $44 million for 2012, which she described as a "manageable problem."

Legislative budget analysts say the biggest budget problems include $71 million in higher cost from the state program cuts and aid cutbacks, $67.6 million in higher pension costs in 2012, $45.7 million in higher salary costs. They also estimate a $10-million shortfall in red-light camera revenue.

Eric Naughton, deputy county executive for finance, said Levy has already ordered departments to set aside 10 percent in nonmandated spending, which will save $18 million this year, and to expect $25 million in savings by leaving positions vacant in part because of the pending sale of the nursing home.

The difference in fiscal forecasts, officials say, is that legislative analysts include hiring of 90 additional correction officers in 2012 for the new jail, which Levy does not. Levy's forecast also includes borrowing money from the state over five years to pay for the spike in pension costs, which would save the county $48.3 million in 2012, and which the legislature didn't include.