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Suffolk’s Budget Crisis: Whose Fault Is It Anyway?

Originally Posted: March 14, 2012

Jay Schneiderman

Montauk - "News of Suffolk's looming $500 million deficit came as little surprise to anyone who has been watching County government over the past few years. Expenses beyond the County's control have been skyrocketing while revenues are plummeting. The County has been doing everything it can to reduce the size of government and still deliver mandated services. The half a billion dollar hole doesn't actually yet exist, it's a worst case projection for the future, yet some have rushed to point fingers and assign blame. The obvious target is the Former County Executive, Steve Levy, who in turn is pointing his finger at the Legislature. But the independent panel of financial experts that made the alarming deficit projection blamed neither entity for the problem, which they attributed predominantly to the recession and ballooning employee related costs.

Clearly trying to defend his record from the sidelines, former County Executive Steve Levy issued a written response to the panel's deficit prediction (March 5, 2012). His statement blames the Legislature for throwing the budget out of balance by not agreeing to layoff 700 employees and not selling the County owned nursing home.

The legislature actually voted to sell the nursing home. Unfortunately the only buyer walked away from the deal after the state changed a reimbursement formula for Medicaid, hardly the legislature's fault. The suggested layoffs of 700 County employees were proposed for January, 2012 and by Mr. Levy's own admission, only included in the budget to force concessions from labor unions. No analysis was done to determine the County's ability to operate without these individuals. Many of the proposed layoffs were for positions that are largely reimbursable by the State or Federal Government. Others were for positions that generate far more in County revenue than their cost in salary. Needless to say, County Executive Levy never got the needed concessions from labor unions. The legislature kept the layoffs in the budget, but moved the termination date to July 1 of this year to allow the new County Executive to negotiate for concessions or, in the absence of concessions, to develop a new layoff list that would actually save the county money while allowing it to operate. Even with the layoffs and the sale of the nursing home, the County deficit could still reach $500 million by the end of 2013.

County budget problems have existed since the start of "The Great Recession" when sales tax revenues, the largest single source of County operating revenue, fell by $110 million. The hole was filled using short-term revenue sources such as liquidating County assets. Concurrently, costs to deliver County social services spiked due to increase poverty levels. The cost to deliver Social Services is expected to climb another $86 million by next year. Now add skyrocketing pension and healthcare costs. Pension contributions over the past two years have increased $90 million and a similar jump is anticipated for next year. Health benefits have added an additional $40 million. To make matters worse, New York State has reduced County subsidies by $20 million. With diminishing reserves and other short term remedies, it's easy to see how the financial panel arrived at their alarming projection.

The next two years will be filled with many difficult and painful choices. I am prepared to work with County Executive Bellone and my Legislative colleagues on restructuring county government In order to prevent the projected budget hole from forming."

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