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Suffolk budget hole could hit $250 million

Suffolk County Executive Steve Bellone delivers his

Suffolk County Executive Steve Bellone delivers his "State of the County" address at the Suffolk County Legislature building. (Feb. 19, 2013) Credit: Newsday/ Thomas A. Ferrara

Suffolk County could have a budget shortfall of as much as $250 million by the end of next year, budget analysts said Tuesday as County Executive Steve Bellone issued a call for quick action to close the gap.

Bellone's budget staff and the legislature's budget review office blamed much of the potential deficit on superstorm Sandy.

The county could receive $35 million less in property tax revenue due to people whose homes were damaged not paying their bills, officials told the legislative Budget and Finance Committee. Also, Suffolk may have to pay $17.5 million in storm cleanup costs beyond what the federal government will reimburse and could receive some $9 million less in sales taxes.

The stalled sale of the John J. Foley Skilled Nursing Facility in Yaphank accounts for another $32 million of the projected hole: $23 million in unrealized proceeds from the deal plus $9 million in subsidies to keep the home open through September.

"It's extremely urgent we act," Bellone said in an interview. "We've made significant progress, but clearly we have a long way to go, and there are still tough decisions ahead."

In a letter, Bellone asked lawmakers for deficit-reduction ideas and pledged to meet with them by the end of the month to form a plan. Although the administration's $2.7 billion budget for 2013 included no layoffs, Bellone did not rule them out in light of the latest news.

"I think we've got to be creative with how we're delivering services going forward," he said. "The status quo isn't going to work . . . and if there's a way to keep an employee on, even if they're not necessarily a county employee anymore, we'll certainly look at it."

He didn't elaborate, but aides confirmed that he is considering transferring county health clinics to private operators, which would remove 150 jobs from the public payroll.

"None will be easy pills to swallow," Legis. Jay Schneiderman (I-Montauk) said of deficit-cutting measures.

The county has been grappling with potentially large deficits for more than a year.

Last March, a Bellone-appointed panel said the county could see a deficit as high as $530 million through the end of this year. Bellone and the legislature agreed on several measures -- including layoffs and early retirements that reduced the payroll by about 700 people -- that they said closed nearly the entire gap.

Bellone and lawmakers have touted the enacted 2013 budget as balanced, but critics cautioned that it relied on tentative items including the Foley sale and a $70 million proposal to sell and lease back the H. Lee Dennison Building in Hauppauge. That deal still needs state approval, and if it falls through it would add to the $250 million projected shortfall.

"The last few years we've kicked the can down the road, and now it seems we're at the end of the road," said Legis. Al Krupski (D-Cutchogue). "I'd suggest that every action we take, we think about not making things worse, at the very least, and not continue doing business as usual. You're looking at a serious problem here."

Legis. Tom Cilmi (R-East Islip) on Tuesday submitted a resolution to require the county to adopt more detailed, multiyear budget plans to properly forecast problems. The measure was tabled.

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