Suffolk should consider lower cap carefully

The popularity of tax and spending caps could very well lead the Suffolk Legislature to go along with County Executive Steve Levy's call to make the county's existing spending cap tighter. But first, the lawmakers need to take a serious look at how the present one is working and how the new one can be crafted to better fit today's reality.

On Tuesday, in his State of the County speech, Levy proposed several budget-controlling measures, including a few that need Albany action. One purely local proposal is to put on the ballot this fall a measure that would change the cap on annual growth in county spending, approved in a 1983 referendum, from 4 percent to 2 percent.

With Gov. Andrew M. Cuomo proposing and the Senate adopting a statewide tax cap, Levy's move is understandable governmentally. He says Suffolk can't continue with a 4 percent spending cap in a state that may soon have a 2 percent cap on the growth in property taxes. Of course, it wouldn't hurt Levy's re-election chances if a tax cap were to appear on the ballot, attracting a lot of fiscally conservative voters to the polls.

The 1983 cap on discretionary spending, plus a 4 percent limit on the actual property tax levy, approved in 1995, created new vocabulary for the county: "cap compliance" and "piercing the cap." It also led to elusive definitions of two key terms, mandated and discretionary spending. Levy and his predecessors have often moved some items from the capped discretionary category to the uncapped mandated one. Levy says this doesn't matter, because he has held spending in check in both categories.

Still, the legislature's nonpartisan budget review staff often questions the way spending is classified under the cap. Analyzing the 2011 budget, the staff wrote: "The end result has been to make calculation of cap compliance a meaningless exercise."

Another compliance-friendly exercise is borrowing money for small capital projects, instead of spending cash. In his rebuttal to Levy on Tuesday, Majority Leader Jon Cooper (D-Lloyd Harbor) used a chart showing that the county's total net debt has gone from $653 million in 2004 to $1.3 billion in 2010. But Levy argues that borrowing for small projects was only a tiny part of the increase. A new state-mandated jail, open space purchases, sewers and roads, plus additions the legislature has made to his capital spending, are far more significant, Levy insists.

In the end, putting a new cap before the voters probably makes sense, but only after a thorough vetting of what it will actually mean. Cooper is mulling new language sharpening the definition of discretionary. But it might be better to construct the cap so it covers all spending, not just the discretionary kind. That would render the repeated redefinitions unnecessary and offer more fiscal transparency.

There's no rush. It's more than seven months until the Board of Elections has to have the referendum language. So the legislature should take its time, debate it thoroughly and make sure that any new cap fits the need - and works.