Kaplowitz: ‘Financial Degradation a Danger in Proposed County Budget’

By Martin Wilbur and Pat Casey – Board of Legislators Chairman Michael Kaplowitz (D-Somers) sounded alarms last week over County Executive Rob Astorino’s proposed $1.8 billion 2016 budget, charging that it lacked “structural integrity” and could lead Westchester to financial ruin.

Kaplowitz, whose comments came before what was expected to be a marathon day of fiscal decision making yesterday (Monday), contended that a potential $22.6 million shortfall in sales tax revenue and the likelihood of using unrestricted fund balance could jeopardize the county’s AAA bond rating because the reserves could dip below 8 percent of general fund expenditure.

He said that if the county has to use significant reserves to balance next year’s budget – the chairman’s projects fund balance to sink $16 million to $128.3 million – then Astorino would fail in one of his two key goals, protecting Westchester’s rainy day fund.

“This is telling us that at this rate we’re going to be potentially running out of money,” Kaplowitz said, “and this is on the road to Rockland County.”

Astorino’s mistakes are compounded, according to Kaplowitz, because he is also overestimating sales tax revenue for next year. That revenue line is projected to be about $505.5 million by year’s end, rather than the $528.1 million that was forecast. For 2016, the administration has estimated 4 percent over the $505 million figure, or nearly $525.8 million, when it should be budgeting only 2 percent over that number, he said.

Kaplowitz said close to 99 percent of the sales tax shortfall resulted from plunging gas prices, which have fallen $1.10 a gallon on average in the county during the past year.

Furthermore, the currently proposed 2016 budget fails to include money to settle any of the county’s union contracts, all of which will be up by Jan. 1, he said. Then Astorino want to bond tax certioraris.

The county executive has also made some “penny wise and dollar foolish” cuts to various nonprofit agencies, Kaplowitz added.

“That’s a sign of financial degradation of condition and is a problem and it can also wind up costing the taxpayers interest and further expenses,” Kaplowitz said. “This is a huge, huge problem and it belies the county’s main goal and that’s why the goal posts have come down.”

Legislator Benjamin Boykin (D-White Plains) agreed with Kaplowitz. On Monday he told the Examiner he expects to be working until at least midnight to find new revenue sources to cover the budget line items the Democratic caucus wants back in.

A member of the Budget and Appropriations Committee, Boykin said there were deep problems to consider overall with Astorino’s budget and that an auditor’s report received Monday indicated there could be an additional $4.2 million in revenue shortfalls.

In particular, Boykin said he was concerned about the $1.6 million in cuts to non-profits, 25 currently occupied employee positions that would be cut as well as was $1 million in cuts to Public Safety.

“This proposed budget is cutting into the bones of the County’s services,” Boykin said. “This is definitely not the time to be cutting the Public Safety budget with everything going on in the world.”

“There is little flexibility in this budget with more on the downside than there is on the upside,” he added.

However, Ned McCormack, Astorino’s communications director, said the fiscal picture is nowhere near as bleak as Kaplowitz and some others are portraying. His office currently estimates a $15 million shortfall, which represents less than 1 percent of the operating budget, he said.

Also, from 2012 through 2014, there were times when the county was projected to have a deficit, which didn’t materialize, and was able to maintain a fund balance of between $141 million and $144 million, McCormack added.

What often happens is if a line looks like it’s coming off, the county executive makes mid-year adjustments, he said.

“I think the county executive has decided that he’s not going to raise taxes and that he’s going to protect the reserves,” McCormack said. “We think we have a very responsible budget in terms of the spending.”

Although some legislators and supporters of some nonprofit organizations have emphasized the proposed cuts, there are no reductions in the Department of Social Services budget, day care money and many other programs.

Projections also conclude that the 4 percent sales tax revenue over the latest projection for 2015 is accurate, McCormack said.

“Everyone’s entitled to an opinion on the budget,” he added. “It’s the public’s money.”

Late Monday afternoon, the League of Women Voters of Westchester released a statement advising the County Executive take a change in direction.

Citing job cuts in the Planning Department and Board of Elections that would result in insufficient expertise to supervise the 2016 primary and presidential elections as well as capital projects currently being approved and advising against emergency borrowing, the LWVW asked the BOL to consider a tax increase. “County taxes are a relatively small portion of the tax burden on Westchester residents. An increase to the 2 percent cap currently permitted by the State would impact each household very little while helping the County make up the deficits of the past, avoid jeopardizing its AAA credit rating and preserve the quality of life now enjoyed by nearly one million residents in the County,” the LWVW statement said.

The Board of Legislators spent most of Monday mulling additions. On Wednesday, legislators will consider deleting items prior to the third public hearing in the evening. An approved budget could be reached as early as next Monday, Kaplowitz said. The final budget must be approved by Dec. 27.