COLONIE — The Town Board, by a 6-1 vote, furloughed up to 40 employees on Thursday, May 21 in an effort to close a $7 million gap in this year’s budget due, in large part, to a projected 20 percent decline in sales tax revenue.
The number of furloughs was as high as 48, but earlier this week, the state Office of Court Administration said it will allow justice courts to resume in-person business, on a limited capacity, on May 26 so some employees were spared. The final number of furloughs is expected at between 38 and 40 employees.
The Town Board meeting, held with the public and board members weighing in by phone, was contentious at times. Republican Town Board member Rick Field questioned why the town didn’t furlough workers sooner, since the statewide shutdown has been going on since on March 22.
“These are part-timers who have been getting paid and they have not been to work
and I don’t understand it,” he said through a choppy connection. “I think furloughs are a good decision, but you guys are three months late. They are getting paid now, and have been getting paid for months now. If I don’t work I don’t get paid. The town is taking it on the chin with all these people at home getting paid for doing nothing.”
Supervisor Paula Mahan acknowledged that there are employees on the payroll who are not working, but said nobody knew how long the shutdown would last or how long it will last.
“This is a situation that no one has all the answers to. I don’t think anyone expected it to go on this long or to the degree it has,” she said. “Of course, we would have preferred to bring everybody back and have everything resolved. But I was not about to have people here where either their duties cannot be done because of the circumstances of everything closed down around us, or put them in a situation where it could be detrimental to their health.”
The furloughs came after negotiations with the United Public Service Employees Union Administrative Unit and CSEA Units B and C, three of the larger collective bargaining units in the town. CSEA Unit B has 105 employees who are mostly field workers in the Department of Public Works, the Water Department and general services. Unit C has 41 employees and they are generally supervisors, foremen and technicians in the same departments. Most of the furloughs are part-time employees, Mahan said.
Earlier this month, Mahan ordered department heads to trim their budgets up to 10 percent through attrition, restricting overtime and/or postponing projects. While there has not been a formal announcement yet, a host of summer programs are likely cancelled since that phase of re-opening is not until the end, and there is no guarantee when that will happen or in what form.
To field’s criticism, she said comparing private industry to government is “comparing apples to oranges.”
“We are a town, we are here to serve the residents and we are here to serve the taxpayers. That is our job. It is not the same as a business,” Mahan said. “We are not here to make money. Governments cannot make money but we have to have enough money to provide the services. The taxpayers pay the salaries, that’s true, but they also pay unemployment and are paying for the stimulus.”
She also sarcastically congratulated Field on his knowledge of the virus, while criticizing him for a lack of understanding of how the budget works.
“I don’t know where you are getting your information from but if you have answers and can predict everything related to this virus. Good. Because we certainly don’t have the answers. Nobody does,” she said before extending an invitation to Field to come in and look at the budget numbers. “Please come in and take a look at what we did to get to this point before we make statements that you really don’t know how things really are. Come in and take a look and if you still don’t think things are appropriate feel free.”
Town Attorney Mike Magguilli said the town, as per Civil Service Law, cannot unilaterally furlough employees but instead had to negotiate terms with the unions and that took some time. The furloughs are temporary, and the employees will receive unemployment benefits and an additional $600 a week from a federal stimulus package.
“The last thing this town wanted to do was lay off employees,” Magguilli said. “When this first started it was supposed to last until April 15 and it kept getting extended for two weeks and I don’t know about you, but this is my first pandemic.”
Town Board member Danielle Futia, the lone dissenting vote, said she would have preferred to see a list of employees before making a decision and asked to table the vote until the board had a better understanding of the specific jobs being furloughed and what they mean to each department.
The “New York On Pause” order from Gov. Andrew Cuomo kicked in on March 22 and has been extended until at least June 13. With the exception of the hardest hit areas of downstate, the majority of the state has begun reopening, but it is a phased approach and with each phase there are a number of restrictions in place to help stop the spread of the virus.
“None of us knew what was happening with the COVID virus. If we had known it was going to be an extended thing we would not have paid them all this time,” said Town Board member Linda Murphy, a Democrat. “I don’t think anyone has had any experience with anything like this before. The town was doing the best it could on behalf of the employees and now it has become, because of the sales tax and other things, a problem we have to deal with.”
Earlier this month, Mahan said absent federal help the town would be forced to lay off or furlough employees because of a projected 20 percent decline in sales tax, the main reason behind the $7 million deficit.
In this year’s $99.4 million overall budget, the town projected a 4.7 percent increase in sales tax, to about $25.9 million. Generally, to avoid a shortfall, estimates of sales tax increases are conservatively made, but prior to the global pandemic the country’s economy was considered one of the strongest in modern times and that boon trickled down to the local level.
Four percent of sales tax goes to the state and 4 percent is split between the county and the municipalities based on a predetermined formula. While Colonie businesses generate by far the most of any other town or village in Albany County, it gets back about 40 percent based on the logic people living elsewhere spend money in Colonie.
Any reduction in that revenue stream, especially one as dramatic as caused by COVID-19, has a profound ripple effect on budgets across the board. Options to bridge that gap are limited: cut spending, raise property taxes or get aid from a larger level of government.
“For us, the shortfall is due to the reduction in sales tax and fees and things we are not collecting because they have not been able to operate per the directives we were given,” Mahan said. “We have to follow those directives and the bottom line is those funds are in our budget so and we have to compensate for that. Everyone is in the same boat. Some municipalities, their shortfall is in double digits.”
Albany, Schenectady, Saratoga Springs and other municipalities across the state have either resorted to layoffs or are planning on them unless the federal government includes aid to municipalities in a future stimulus package.