“Irresponsible Fiscal Plan Sure to Be Noticed by Credit Agencies—and Will Cost More in Long Run”

White Plains, NY – Democratic Westchester Legislators Pete Harckham (D-North Salem) and Ben Boykin (D-White Plains) today again strongly criticized County Executive Rob Astorino’s Proposed 2015 County Budget, this time for using $6.1 million of the County’s General Fund Balance to pay for operating costs—a classic “one shot” budgetary fix that is part of a larger structural imbalance, and in spite of the County Executive’s declared “goal posts” in terms of not using the fund balance.

     Last week, these two legislators faulted Astorino for relying on an “unprecedented” amount of borrowing to pay for a whole array of costs normally paid for in current year operations, including the borrowing of $15 million for pension amortization and another $8 million for tax certioraris.

     “The County Executive’s irresponsible fiscal plan is sure to be noticed by the credit agencies, and it will also costs taxpayers more in the long run,” said Harckham. “Raiding the County’s General Fund Balance is yet another reckless decision that doesn’t address the need to cut costs and support spending with sustainable revenues.”

     Yesterday morning members of the Westchester County Board of Legislators (BOL) heard that Astorino’s Proposed 2015 County Budget included $6,109,801 from the General Fund Balance that will be used to pay for regular salaries, overtime and equipment in the County’s Department of Information Technology (IT). In previous years, most of these costs were in the County’s Operating Budget in the Department of Emergency Services.

     In his budget presentation, Astorino that there would be no use of the “unrestricted” fund balance, and the IT spending would, indeed, come from the restricted E911 account.

     But Astorino also said that his proposed budget avoided “draining reserves.” The $6.1 million raid on the E911 account in the General Fund Balance, which represents payments to the County earmarked to support emergency 911 services through wireless telephone billings, will leave less than $4,000 in the E911 account in the fund balance though.

     “Using fund balance for operating costs, as a one-shot, is not a smart way to balance a budget,” said Boykin. “Next year, the six million dollars of spending, whether needed in IT or Emergency Services, will still be on the books, but the money paying for it this year will be gone. It then becomes a good, legitimate question for the Administration to answer: how are you going to pay for these costs next year?”   

     It was almost exactly a year ago—November 20, 2013—that Moody’s downgraded Westchester County’s bond rating from Aaa to Aa1 because of “the county’s structural imbalances and limited liquidity.”

   And in 2015 the Astorino Administration plans on borrowing $40 million in bond anticipation notes (BAN), which has never been done this before in Westchester—essentially, borrowing money with the promise of borrowing again to catch up later on.

     Meanwhile, for the fourth year in a row, the County will be coming up short in a cash crunch and borrowing again, this time $90 million in tax anticipation notes.  

     Both Harckham and Boykin noted that the BOL is hard at work trying to identify places in the budget to reduce spending so some of the proposed borrowing can be returned to the operating budget.