At the Schenectady County Legislature’s first 2010 budget hearing held Tuesday, Sept. 8, Democratic lawmakers proposed a 2.13 percent tax cut, however, detractors say such a move would only create a hole in the budget for next year by using federal stimulus funds as a temporary Band-Aid.
They’ve increased spending $9 million, and they’ve taken federal monies and then turned it around and reduced the tax rate, said Schenectady County Legislator Robert Farley, R-Glenville. `They’ve overestimated sales tax revenues, they’ve underestimated obligations of the county in a number of areas.`
The proposed budget showed an increase of appropriations of $8.7 million and a decrease in the property tax levy of $1.4 million.
Kathleen Rooney, Schenectady County manager, said that while the budget is based on the assumption that the economy will improve, county officials are `cautiously optimistic,` as the county anticipates a slight delay of impact on revenues.
`We are applying our Federal Stimulus revenue dollars as part of a bridge,` said Rooney.
Susan Savage, D-Niskayuna, chairwoman of the Schenectady County Legislature said in a statement that she asked Rooney to propose a budget that reduces the tax burden on residents while maintaining the core services provided.
`The current economic and financial climate has been difficult on all of our county residents,` said Savage.
Rooney said that the county has `significantly tried` to contain the growth of property taxes.
`Over the past five years this County Legislature, in working with myself and the department heads, has really focused on trying to contain the rate of property tax increases and have really focused on cost containment contract reduction,` said Rooney. `Other counties within the Capital Region had an average of a 43 percent property tax levy increase from 2004 to 2009. Schenectady County, in comparison, went up 27 percent.`
Under the budget proposal, the property tax levy for the county would decrease by 2.13 percent ` or $6.18 per $1,000, making for a 3.95 percent decrease from last year, when the rate was $6.44 per $1,000.
`The 2010 full value tax rate ` the tax rate upon which counties must tax legally in New York State ` is the lowest tax rate since 1956,` said Rooney.
She added that in 1956, the rate was $5.77 per $1,000, making this the lowest tax levy rate since 1956.
The expense side of the budget is going up about $8.6 million.
`There are two types of expenses that are driving that,` said Rooney.
`One is mandated costs where we don’t have a choice. We’re required to pay them,` said Rooney.
The first is the mandated cost is $2.9 million in Mandated Retirement System Changes. From there, the county is facing $837,000 in Medicaid Increases, $581,000 in public safety and law enforcement cost increases and a $250,000 increase in the Office of Child and Family Services.
Rooney described 2010 as a `transition year` because of several factors, including $7 million in external pressures such as mandated cost increases and economy driven impacts (sales tax revenue, for example, is down).
Rooney said the state retirement system is increasing how much the county must contribute by about $3 million, from $4.9 million to $7.8 million. Mandated programs take up 77 percent of the total net county sales and property taxes collected.
She said core services, including the county library system, highway system, senior and long-term care services, public safety, public health infrastructure and education will be preserved.
For 2010, the total net county cost is $129.9 million. This includes $91.7 million in mandates, $19.9 million in non-mandates, $10.4 million in facilities and central services, and $8.7 million in mandatory legal obligations. Medicaid is costing the county $32.3 million dollars of their county property and sales tax revenues ` up from $31.4 million.
`In 2011 that number will grow to $33 million. It’s an automatic built-in increase each and every year,` said Rooney.
Farley said using Federal Stimulus money to pay off the Medicaid costs will only artificially lower taxes this year.
`What they’ve done here is they are paying for certain Medicaid expenditures, that ordinarily the county would have to pay for, with stimulus money, which is fine, but at the end of the day that’s how they’re getting to their tax cut,` said Farley.
After discussing other cost mandates, Rooney moved onto cost-containing strategies the county has taken over the past six years to minimize the impact on taxpayers through cuts and creative strategies to control the costs that are within the county’s control. These efforts have resulted in savings of approximately $20 million and include:
Instituting strict hiring and purchasing controls.
Reducing the county workforce by eliminating 200 positions.
Implementing groundbreaking employee health-care cost cutting initiatives, including Medicare Advantage Plans and a Canadian Drug Purchasing Program.
Implementing a child welfare management program that maintains the health and safety of children while realizing savings through cost effective programming and revenue maximization.
Reducing the county vehicle fleet by 13 percent.
Implementing intergovernmental cooperative efforts. “