WHITE PLAINS, NY—As part of the detailed overview of the County Executive’s 2016 budget proposal, the Citizens Budget Advisory Committee (CBAC) appeared before the Board of Legislators to issue their feedback on the proposal. CBAC is a non-partisan group of 10 members tasked with seeking regular input on fiscal matters from the public through public hearings and through monthly meetings of CBAC.
For the second straight year, CBAC expressed significant reservations about numerous practices and proposals within the 2016 budget proposal. On behalf of the Democratic caucus, Legislator Ben Boykin, MBA/CPA, reacted with the following statement:
“Many of us voted against last year’s budget for the reasons spelled out by CBAC and unfortunately this proposal from the County Executive compounds those problems. As a result, I believe the overall mismanagement of our County’s finances have become clear and are starting to have real impacts across many services the county has provided in the past. The budget proposal continues to rely heavily on borrowing to pay for operating expenses; this will result in higher taxes for all taxpayers in the future as we repay principal and interest on these borrowings. Additionally, sales and use taxes appear to once again be over-estimated. Lastly, the proposed cuts to support organizations such as Legal Aid, Arts, Cornell Cooperative and other non-profits will in all likelihood impact services that are provided to County residents. These programs must be evaluated on a much more rigid and objective cost-benefit analysis.”
Below are some excerpts of CBAC’s Report on the Westchester County 2016 Operating and Capital Budgets.
Revenues: “CBAC is concerned that the projected sales tax revenue is too aggressive. The 2015 Budgeted amount of $528M will not be met and has now been lowered to $506 million which is flat over the 2014 sales tax revenue. The 2016 Budgeted revenue of $526 million is a 4% growth over $506 million. We recommend the 2016 Sales Tax revenue be reduced by $10 million to $15 million to $516 million to $511 million. This represents a 1% to 2% growth over 2015 Projection. We believe that 2016 Sales Tax revenue will be impacted by the continuing slow growth in retail sales and the increased saving rates in the economy. Fuel prices may start to show an increase but will not return to the early 2014 levels. Review of other counties projections show projections in the 1%-2% range. The view of the CBAC is the County should work to insure ensure a more reliable income stream from Sales Tax as well as a more prudent approach to the forecasting a revenue this essential to the County operations.”
Expenditures:
- Pension Payments: “The County continues to borrow from the NYS Pension Stabilization Program to fund the required pension contribution. The 2016 proposed borrowing is projected to add another $2.7 million to a total $108 million borrowed over the past four years. This strategy will result in a roughly $21 million additional cost to the County in interest over the next 10 years or roughly $2 million in increase expenses over the next 10 years. We view this as borrowing to fund what is a current operating expense. Further, while this is off the books borrowing it should still be considered in looking at debt ratio.”
- Certioraris: “The 2016 Budget includes an $11 million for Certioraris expenses [Certioraris are repayments of property tax challenges that have been settled]. The 2016 Revenue Budget contains bonding revenue of $11.5 million for the Certs. We view this as borrowing to fund what is a current operating expense. This $11 million represents 2% of the Proposed Tax Levy of $548 million. We recommend that the County consider establishing a reserve fund certs. It should also be noted that the Sewer Districts are expected to have certs totaling $2.8 million or 2.2% of the Proposed Expenditures of $127 million. The Sewer certs are not offset by borrowing.”
- Workforce Productivity and Service Levels: “The County has kept the tax levy is flat over 6 budgets, federal and state aid have been reduced, sales tax has been increasing but at a much lower rate than anticipated. In order to meet revenue restraints the County has mainly relied on reducing the County workforce. Services are stated to be maintained. How has this been achieved over all County Operations? What productivity metrics are available to demonstrate that the reductions in headcount have been offset increased productivity so service levels are maintained? How is the increased productivity being achieved? What metrics will be in place to measure progress? In order to assure that service levels are maintained the B&A should review these metrics on a bi-monthly basis.”
Other Items of Concern:
- DPW: “The open engineering positions continue to be a concern to the CBAC. Because of the backlog of current projects plus the required ongoing workloads and the higher cost of out sourcing this work County needs to assess how to solve this issue. We understand that part of the problem has been finding engineers with the proper training willing to work for the salaries offered by the county. Perhaps the County should consider revising the salary scale for the Engineering positions.”
- Labor Costs: “The County continues to have labor contracts that have not been resolved. While we understand that the County may not wish to flag amounts held in contingency for contract settlements and increases we wish to highlight our concern that given the leanness of this budget that this item be addressed in your discussions. If these contracts were to be settled is the budget protected or would the County need to dip into the Fund Balance? Additionally, we are concerned that the continued failure reach a contract with CSEA is a lost opportunity for a reduction in net medical expenses? CSEA has reached contracts with other municipalities that include health insurance contributions. As some point, the failure to reach a contract becomes more expensive than not.”
- Maintaining the County’s Bond Rating: “The CBAC is concerned by the weaknesses noted in the Moody’s rating and believe that concerns expressed should be kept in mind as you work through the Budget for 2016 and working to close the gap in 2015 and how the County will address the use of fund balance.”