County Executive Steve Bellone Tuesday during discussions of the county...

County Executive Steve Bellone Tuesday during discussions of the county budget deficit, which he described as "the worst fiscal emergency in our county's history." (March 6, 2012) Credit: Newsday / Karen Wiles Stabile

Facing a $530-million budget hole, Suffolk County Executive Steve Bellone Tuesday declared "the worst fiscal emergency in our county's history" and said it was unlikely that he would be able to prevent nearly 500 jobs from being eliminated in July.

"These numbers are so enormous, it's not something that can be solved immediately," he said minutes after the independent task force he convened in January presented its projections to the county legislature. "It's much larger than any of us imagined."

The deficit projections include $33 million to close 2011 (the first year-end budget hole since 1992), $148 million in 2012 and $349 million in 2013. Task force members attributed the deepening gap to revenues -- largely from sales tax -- that are falling further and further behind rapidly increasing salary, benefits and pension obligations.

The jobs that may be eliminated had been given a six-month reprieve by the legislature in the 2012 budget. Lawmakers had funded nearly 600 jobs until July, leaving it up to Bellone to decide whether they could be paid for the rest of the year.

Richard Halverson, a former assistant deputy director of New York City's financial control board, who led the task force, said Suffolk's lawmakers have been overly optimistic on sales tax revenue growth and savings on employee overtime.

This year, for example, the legislature approved a budget that projected sales tax revenue would grow by nearly 4 percent. Last year's growth was 2.6 percent -- a difference of about $12 million -- and the task force estimated the figure could fall to 1.5 percent in 2013. Sales tax made up 45 percent of Suffolk's general and police fund revenue in 2011.

Bellone said he didn't foresee asking the state to approve a county sales tax hike, and continued pledging not to raise property taxes beyond the state cap.

He'll also meet Wednesday with labor unions to begin talks that could lead to requests for employee health care contributions and other concessions.

Restoring 464 of the jobs slated for elimination July 1 would add $25 million to the deficit this year alone, officials said. The roughly 200 other jobs only funded through June are in the county nursing home. Bellone said whether to close or privatize part of the nursing home is still subject to talks with lawmakers.

"One of the things we clearly saw today was that the combination of layoffs plus employee concessions still isn't enough to balance the budget," said Deputy County Executive Jon Schneider.

Cheryl Felice, president of the 6,500-member Suffolk County Association of Municipal Employees, said she remained hopeful that something could be worked out to save jobs and avoid further layoffs. "Is the membership scared? Are they frightened? Devastated? It's palpable," she said.

Lawmakers reacted to the deficit with surprise and calls for action. Legis. DuWayne Gregory (D-Amityville) said "the numbers are truly staggering."

Legis. Thomas Barraga (R-West Islip), said that county reliance on sales tax revenue, and its relatively small property tax base, make expense-side cuts inevitable. "We do not have time to waste here," he said.

The legislature will soon consider a request for something that hasn't been done in two decades: borrowing $90 million in revenue-anticipation notes to continue making payroll.

Former County Executive Steve Levy said his final budget was balanced, despite the task force's findings. He said that had the nursing home closed and had unions agreed to health care, the county's fiscal health would be sound.

Bellone shied away from assigning blame for the county's deficit but said the bleak outlook "is reality . . . and I choose to embrace reality, so we can build Suffolk County's financial future on an honest basis."

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