Suffolk fiscal experts said Tuesday that the county faces a potential shortfall of as much as $176 million for the 2016 operating budget, but said the gap could be cut to $87 million if the county keeps borrowing from its sewer fund and for pension costs, and raises police property taxes 2 percent.
Legislative and executive budget aides, appearing before the legislature, also disclosed that preliminary audit numbers indicate Suffolk will end 2014 with a $10 million deficit, the result of an $18 million shortfall in sales tax revenue. Comptroller John M. Kennedy Jr. later said the estimate is premature because not all numbers are in and the audit will not be done until at least late May.
Using 2014 and 2015 budget figures and a forecast of 2016 finances, budget aides project a $37.8 million shortfall in sales tax, $16 million in higher health insurance costs, and a $14 million drop in traffic violations bureau revenue, the result of axing the school-zone speed camera program and of drivers becoming aware of red light camera sites. Aides also included an $11.25 million shortfall from the county not selling the former Foley nursing home in Yaphank.
Budget aides also warned that the county faces $78.4 million in shortfalls if it does not continue the practice of borrowing $54.9 million from the state for pension costs and another $23.5 million from the county sewer assessment stabilization fund. They said the gap could be cut nearly in half by the borrowings and a 2 percent property tax hike in the police district, which is levied in Suffolk's five western towns. That increase would net $12 million in 2016.
Michael Brisson, of Moody's Analytics, projected a 3.5 percent increase in sales tax revenue this year and 4 percent next year, providing an additional $16 million in 2016, despite lower than expected increases for the past two years.
Budget aides also said they have included funds to settle contracts with correction officers and deputy sheriffs.
Connie Corso, County Executive Steve Bellone's budget director, said the administration's shortfall estimate, based on slightly different assumptions, is $166 million. But she said the county has made "staggering achievements" by keeping costs down, reducing borrowing and consolidating agencies. It has lowered its payroll by 1,150 over the past four years, a level lower than 2007, she said.
Legis. Louis D'Amaro (D-North Babylon) said he is "definitely encouraged" that the gap is far smaller than the $500 million chasm at the height of the county's fiscal crisis. "I think we are trending in the right direction, although sales tax is not where we need it to be," he said. D'Amaro added the county should wean itself from continued borrowings.
Legis. Thomas Cilmi (R-Bay Shore) said, "The fact is we are continuing to use a variety of borrowing gimmicks to pretend our budget is balanced. The county is still bleeding and we need more than Band-Aids to fix it."He also criticized sales tax estimates and said the county should budget no increase next year, using any extra money to bolster the tax stablization fund.
Robert Lipp, the legislature's director of budget review, warned that a major budget "wild card" is $34 million in promised savings from an employee mail-order drug plan. A reconciliation expected by June will show if savings are achieved, and if not, county workers could face other cuts to make up for it. Any savings, he said, could reduce the shortfall.
While budget aides offered no new proposals to reduce cost or raise revenue, Presiding Officer DuWayne Gregory (D-Amityville) said that the session was "a starting point" for budget deliberations and that he expects the county will need more state legislation to help. He said a higher vehicle registration fee to match Nassau's, which could bring in $10.4 million, or an increase in the 3 percent hotel-motel room tax are areas to explore.
Cilmi said he is drafting a resolution calling for the $630 million Department of Social Services to come up with 10 percent in savings. "We need the kind of reform that will finally help us balance our books," he said.