The good news-bad news breakdown in Suffolk County Executive Steve Bellone's first budget submission is simple enough: It would finish the work of eliminating the current deficit, once estimated at anywhere from $420 million to $530 million over three years. It also keeps the general fund spending increase under the 2 percent property tax cap and freezes the general fund tax, though it does raise police taxes for most of the county's taxpayers.
But some of the methods Bellone uses to get there are unsavory, and at least one of the budget's assumptions carries a real risk.
First, there's the proposed sale and lease-back of the most visible county building in Hauppauge, the H. Lee Dennison Building. Though he considers this a last-resort item, Bellone hopes to get permission from the State Legislature to change a law, so the county can sell the building to the Suffolk County Judicial Finance Agency. If Albany goes along, the agency would float bonds and buy the building from the county, for an estimated $70 million. Then the county would repay the bonds over 15 years. If the economy returns to something like full vigor, the county could buy its headquarters building back earlier, saving money on the debt service. Meanwhile, though, Suffolk would be paying off debt on a building that it currently owns.
Two decades ago, Gov. Mario Cuomo sold Attica Correctional Facility to the Urban Development Corp. to get cash in a budget crunch. The state is still retiring that debt, but the deal has cost the state extra hundreds of millions. If Bellone has to sell the Dennison building, he must make sure the costs of borrowing don't go that high.
The other big worrisome proposal is the decision to borrow $35.6 million to pay for an arbitration award of retroactive pay to correction officers. Bonding for operating expenses -- even retroactive pay -- is generally seen as a no-no. Add this to the Dennison sale, and the county would have more than $100 million in new debt, with no new buildings or roads to show for it -- just relief today, but a continuing problem in the next few years.
There are other one-shot revenues in the budget that make more sense: selling land in Yaphank for $20 million, for example, and selling the John J. Foley Skilled Nursing Facility in Yaphank for $23 million, which would save as much as another $10 million in avoided operating deficits in 2013. But the Foley sale faces the real possibility of a lawsuit. If that happens, and it drags on all year, it's a $33-million budget hole.
Though Bellone does freeze the general fund property tax, he proposes a 2.6 percent increase in the property tax in the police district, in the five western towns. The increase seems reasonable, and if lawmakers reject it, that's a $12-million-plus budget hole.
All of this is not to say that Bellone hasn't taken real steps in reducing the deficit. He has. But the increased borrowing is worrisome. The legislature's budget review staff should look especially closely at these elements of Bellone's proposal. The lawmakers may find in the end that, as unpalatable as the one-shots are, the alternatives -- such as further layoffs -- would be too painful. But in adopting the 2013 budget, they have to work to make the county's finances structurally balanced in the long haul -- not just to get past the immediate crisis.