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Ned McCormack, Communications Director (914) 995-2932 Contact: Donna Greene (914) 995-2935
FOR IMMEDIATE RELEASE: Nov. 9, 2010
ASTORINO PROPOSES 2011 BUDGET WITH 1 PERCENT DECREASE IN PROPERTY TAX LEVY Budget maintains essential services, protects the most needy, while cutting spending across the board County Executive Robert P. Astorino today released his proposed budget for 2011 that decreases the county property tax levy by 1 percent, cuts spending, reduces the county work force by 705 people from a year ago, and still maintains essential county services, including all bus routes. “I was elected on a pledge not to raise property taxes,” Astorino said in his message to the Board of Legislators, which now must review the budget proposal. “In this budget I fulfill that promise and go a step further, calling for a 1 percent reduction in the county property tax levy. Small as it may be, this tax decrease stands as a powerful symbol that elected officials can actually deliver on a promise and can cut spending and taxes responsibly.” Astorino said his budget does four critical things: • • • • Provides needed relief to county taxpayers Protects the neediest Preserves essential services Promotes long-term structural financial reform.
He added: “To accomplish these goals, tough choices were confronted and difficult decisions were made. No area of the budget escaped scrutiny. In all cases, reasonable and rational decisions were made based on fair and objective assessments of the data and information available.” The county executive also released his proposed capital projects budget, as well as budgets for the county’s special districts (sewer, solid waste, and water). -- more --
Budget Proposal P.2
These budgets now go to the Board of Legislators, which has until Dec. 27 to approve a final spending plan for next year. The proposed budgets are available on line at: www.westchestergov.com/budget.
Astorino’s proposed operating budget calls for $1.786 billion in spending for next year, a decrease of $33 million from the $1.819 billion budget of 2010. Had Astorino made no cuts, spending in the budget would have increased by a projected $116 million. Every $5.6 million in net spending amounts to about a 1 percent increase in the county property tax levy. The budget proposal raises just over $555 million through the county government’s property tax levy. The 1 percent decrease for 2011 lowers that tax levy by approximately $6 million compared to 2010. County taxes account for about 20 percent of a taxpayer’s property tax bill. The remainder comes from taxes levied by schools, local governments and special districts. The exact impact of the county tax levy on a property owner varies from community to community, due to different local assessments. Astorino described the challenges confronting him as enormous. When he took office Jan. 1, he immediately directed his commissioners to come up with proposals to reduce spending. Since then he has proposed and pushed through the Board of Legislators initiatives that produced about $50 million in savings. One of the most expensive portions of the budget is the cost of county employees, particularly the soaring costs of their health care and pension benefits. For 2010, the average annual cost of a county worker is $110,000, including all benefits. Next year, this number will be $117,000. Fringe benefits in 2011 will amount to a staggering 55 percent of salary. As a consequence, a workforce reduction is necessary to make meaningful cuts in spending. Compared to 2010, Astorino’s budget proposal would shrink the workforce by 12 percent, or 705 positions. Almost 70 percent of the reductions were accomplished through 465 voluntary buyouts earlier this year and by eliminating 14 vacant positions. However, 226 layoffs will still be required. “Behind each of these layoffs are individuals and families, so I fully understand the hardship created by this kind of action,” Astorino said. “These layoffs are no reflection on the dedication and hard work that characterize the employees of Westchester County.” Astorino noted that the county executive’s 9th floor staff has been reduced by 19 people, or 39 percent, from the end of 2009. -- more --
Budget Proposal P.3
“The harsh reality that must be faced is that the ever-escalating cost of the county’s labor contracts now exceeds the ability of taxpayers to pay for them.” To lower labor costs, Astorino had asked the county’s largest union, the Civil Service Employees Association, to forego a 4 percent raise and contribute to their health care costs. Earlier this year, the county executive implemented a plan to get non-union employees, including himself, to contribute to health care. Health care costs for county employees more than doubled over the last decade. These costs have jumped from $82 million in 2007 to almost $111 million in 2010. Even with the reductions in the workforce, this number will be $117 million in 2011. Pension costs for next year are projected to increase to $57 million, from $46 million this year. These costs are projected to be $107 million by 2015. The costs will be even higher if the county does not opt into New York State’s Employer Contribution Stabilization Program. Astorino said he was asking the Board of Legislators to approve the county’s participation in the program, which allows pension costs to be paid for on an amortized basis over a period of years, as opposed to the year they are incurred. However, in spreading out the payment period, the county incurs new financing costs. “I am reluctantly recommending this to avoid deeper cuts in services and additional layoffs,” Astorino said. The county’s property tax accounts for about 31 percent of all revenue and the county’s sales tax about 25 percent. The remainder is state and federal aid, mortgage and hotel taxes, investments, fees and other revenues. Sales tax revenue was at a high in 2007 and 2008, before the recession hit fully, generating about $363 million in each of those years for county government. In 2009, this number plunged to about $325 million, far below what had been budgeted. While the sales tax has modestly rebounded in 2010 – a trend that is expected to continue in 2011 – it will still be less than in 2008. For 2011, the budget anticipates $358 million in sales tax revenues, a projected increase of 4 percent over 2010. “It is extremely important that our projections are realistic,” said Astorino. “If we overestimate sales tax, our budget will be left with a hole and no way to fill it.” State and federal revenues are projected to decrease by a net $16 million in 2011. This includes a cut of $3.5 million in state transportation aid and a reduction in Federal Medical Assistance Percentages, the so-called FMAP money. Revenue from investments and sales and hotel occupancy taxes are expected to be flat in 2010 compared to 2011. In the case of the mortgage tax, the projected revenue of $13.85 million is still significantly down from the almost $19.3 million generated in 2008. -- more --
Budget Proposal P.4
Protecting the Neediest
Astorino’s budget continues to provide services to Westchester’s neediest, particularly important as the nation comes out of the recession. The largest expenditure in the budget continues to be for programs run by the Department of Social Services (DSS), many of which are mandated by the state and federal governments, such as Medicaid and temporary assistance. The overall proposed budget for DSS is $575 million, which is the same amount as this year. However, the portion of the budget that goes directly towards providing services to individuals and families in need is up by $6 million. “This shows a solid commitment to the county’s safety net,” Astorino said. “Where we have made cuts, our aim has been to address duplications, overhead and inefficiency, not services.” Better management has produced significant savings in the following areas: • Foster Care: Westchester County expects to save $3.4 million a year by bringing high-needs children back to Westchester, returning them to their families or to foster care closer to home, as opposed to more costly out-of-state and out-of-county facilities. • Shelters: The county will have a net savings of $1.9 million by closing two underutilized shelters for the homeless. Through its programs to find permanent housing for the homeless, DSS has been able to reduce the need for shelters. What typically used to take well over a year is now happening in about three months on average. Slated for closing are the WestHelp family shelter in Greenburgh, which has a 55 percent average vacancy, and the Oasis single shelter in New Rochelle, which has a 64 percent vacancy rate. Oasis is scheduled to close in the first quarter of 2011 and WestHelp by the fourth quarter. With the closings, the system will still have a 20 percent vacancy rate among its remaining 10 shelters. As of September 2010, the county housed 594 single adults and families in 12 shelters. That’s down from a high of 1,333 families and individuals in January 1998. “The foster care and shelter savings represent major success stories,” Astorino said. “In the case of the shelters, we are saving money because we are getting people into housing quicker. In the case of foster care, we are providing care closer to home, which helps the kids and their families, as well as county taxpayers.” -- more --
Budget Proposal P.5
In addition, the county will save about $4.3 million on day care costs in two ways: by requiring larger parental contributions from some recipients of day care subsidies; and by setting a limit of 385 on the number of Title XX child care slots. As of the end of October, there were 289 children in the program. For a family of three earning $36,620 a year, the increase amounts to about $6 a day. The parental contribution does not increase if a family has more than one child in day care. Westchester families would still be paying a smaller parent share than families in New York City, and the same rate as residents paid between 1998 and 2005. For the Health Department, the budget proposes to end $1.9 million in subsidies to three neighborhood health centers: Mount Vernon Neighborhood Health Center (MVNHC), Open Door Family Medical Center and Hudson River HealthCare. Historically, the county’s subsidies were intended to offset the cost of non-reimbursed public health services, such as treatment and follow-up care for tuberculosis and STDs. However, in recent years the centers have been using the payments to subsidize primary care. The previous administration attempted to cut these subsidies as well, but the funds were restored annually by the Board of Legislators. In renewing the effort to eliminate these subsidies, Astorino noted that federal health care reform will give these centers a new stream of revenue. MVNHC was just awarded $12 million to upgrade and expand its facilities and $4.1 million for increased demand for services, capital improvements and health information technology; Hudson River Health Care was awarded $2.9 million, and Open Door is to get $1.9 million, all new federal funds. The Department of Community Mental Health will close its four mental health clinics in Peekskill, Mount Kisco, Yonkers and Mount Vernon. Nonprofit groups currently operate in these communities, duplicating the services provided by the county. The driving force behind the decision is plunging state reimbursement rates that would more than double the county’s cost to run the clinics, from $1.2 million to $3 million. Operating the clinics also presents a conflict for the county because the Department of Community Mental Health is acting as both a provider of services and the regulatory watchdog of those services. Most other counties have already gotten out of the clinic business. Beyond the costs and conflicts, the change makes sense for the patients and the nearby non-profit clinics. Dr. Grant Mitchell, the commissioner of Community Mental Health who first recommended the changes, said the local agencies would be able to provide comparable care to those now served by the county clinics and the new patients would provide new revenues for them. “It just doesn’t make sense for the county to compete with nonprofit agencies when they can provide the necessary care and save taxpayers money in the process,” Mitchell said. A transition plan will be put in place for every patient before the clinics close. -- more --
Budget Proposal P.6
Preserving Essential Services
The proposed budget reflects a $3.8 million reduction in state aid to the Bee-Line Bus system. This reduction threatened major cuts in service to the Bee-Line, which transports 110,000 riders a day. However, a planned restructuring of the Department of Transportation, so that it can operate with 19 fewer workers, will save $1.7 million. Coupling these savings with other efficiencies means no cuts in Bee-Line service are necessary at this time. But they could be necessary at a later date if state aid is further reduced over the course of the year. The budget maintains all core public safety services, including police, corrections, emergency services, health, environmental protection, and continues the county’s longstanding commitment to parks, recreation, nature conservancy and land preservation. Through the accompanying capital budget, the county’s infrastructure needs are being addressed and its economic development agenda is being driven forward. Astorino expressed his disappointment that the legislators have not acted on his cost-saving proposal to merge the departments of Public Safety and Emergency Services. He urged them to consider the merger as part of their budget deliberations.
Long-Term Approach, and Roads Not Taken
The county executive detailed various other measures that he had been presented with – but rejected as irresponsible – to close the budget gap. He cautioned the Board of Legislators not to look for one-shots and budget gimmicks that would jeopardize the county’s long-term fiscal health. • Sales tax projections: Astorino cautioned the legislators not to project overly optimistic increases in sales tax revenue. The 4 percent increase he has included in his proposed budget is based on the region’s consensus forecasts. • “Rainy Day” fund: While Astorino, like county officials in previous years, plans to use some of the county’s unreserved “rainy day” fund balance, he cautioned the legislators to make sure they do not deplete it below 5 percent of operating expenses. To do this, he said, could jeopardize the county’s three AAA bond ratings. • OPEB: Astorino urged the legislators to avoid the temptation to tap into other funds such as the Other Post Employment Benefit (OPEB) designated fund balance. These funds are explicitly set up to pay for specific future expenses. -- more --
Budget Proposal P.7
Other Budget Highlights
• Astorino said he was streamlining the county’s Human Rights Commission because much of its work is duplicated by the efforts of similar commissions on the federal, state and local levels. As such, he is proposing having the county commission work more closely with the county Department of Law as a way of reducing costs. This sharing of resources is expected to save $559,000. • Astorino proposes funding for the Arts in Westchester at $1 million. This is essentially the same as proposed by the former county executive for 2010, but about $600,000 less than approved by the Board of Legislators. • All funding is cut to the Cornell Cooperative Extension, which runs programs for youth and adult horticultural, fitness and nutrition, saving $1.3 million. The service was deemed nonessential to the running of county government. • • • • • • Astorino proposes to allocate $1.5 million to the agencies that receive funds through Invest in Kids, a reduction of $634,000. The agencies will be asked to reapply and compete for funds. The pools at Sprain Ridge and Playland will be closed, as both are in need of extensive repairs. The Sprain Ridge Pool would need $500,000 in repairs to open next year. Playland Park will operate as is for another season. The county is awaiting submissions due in February to its RFP (request for proposals) dealing with the long-term future of the park. Subsidies to groups sponsoring ethnic festivals will be eliminated, saving $100,000. Fees will be increased slightly for golf, contributing to a net savings of $800,000. Staff at Hilltop Hanover Farm in Yorktown will be reduced to two, from four. This will give the county time to find a non-profit agency to take over operations. This will save $200,000.
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Budget Proposal P.8
• The proposed capital projects budget calls for $138 million in spending, of which 47 percent comes from outside sources. The projects include infrastructure improvements to buildings, parkways, roads, dams and bridges, technology upgrades and park improvements, as well as funding for affordable housing, some of which is required by the county’s Housing Stipulation with the federal government. . • The budgets for the individual sanitary sewer districts reflect the increases for debt service expenses associated with recent Capital Projects. However, reducing operating and maintenance costs wherever possible in the Consolidated Sewer District has eliminated the need for any tax increase. This is the result of costs associated with a $173 million consent order negotiated with the state Department of Environmental Conservation (DEC) in 2008 to improve treatment and sludge disposal systems at its plant and a $235 million consent order negotiated with DEC in 2004 with New Rochelle and three other districts to reduce the amount of nitrogen discharged into the Long Island Sound. • The tax for those communities in the solid waste district will remain flat.