SUFFOLK CLOSEUP
By Karl Grossman
The top fiscal watchdogs in Suffolk County government are critical of County Executive Steve Bellone’s recommended $2.96 billion county budget for 2017.
Town of Smithtown people figure deeply in this.
“It is constructed so poorly and so tenuously,” declares County Comptroller John M. Kennedy, Jr. of Nesconset in Smithtown. “It is fraught with peril. It is not unlike what we see to the west of us,” he said, referring to the financial mess that Nassau County government has been in for years resulting in New York State imposing a Finance Authority to oversee county fiscal matters.
“It’s as if,” said Mr. Kennedy, “he [Bellone[ is standing on the 12th floor” of the county’s H. Lee Dennison Building, where the county executive has his offices, “with a megaphone calling on the state to ‘take us over.’”
As one example, Mr. Kennedy cites Mr. Bellone’s desire to borrow $60 million over two years to pay retiring police for what is called SCAT—unused sick and vacation time. “You begin to bond out for operating expenses and you’re done,” said the comptroller. “This is a fundamental: you can’t bond an operating expense.”
“The most basic responsibility and obligation of a county executive is to assemble and submit a balanced budget to the legislature for consideration and adoption,” said Mr. Kennedy.
“He has failed to meet that most fundamental obligation.”
Mr. Kennedy, Suffolk government’s chief fiscal officer, is an attorney with a master’s degree in business administration with a concentration in capital budgeting from Adelphi University. He was a member of the Suffolk Legislature for a decade his district composed of a large part of Smithtown. He previously worked in the county clerk’s office. He knows Suffolk government well. He was elected comptroller in 2014 and took office last year.
Also critical of Mr. Bellone’s recommended budget is the Budget Review Office of the Suffolk Legislature. It was established after creation of the legislature in 1970 as a Suffolk version of the federal government’s non-partisan Government Accountability Office.
Its director is Robert Lipp of St. James in Smithtown. He has a doctorate in economics from Stony Brook University. The Budget Review Office’s 18 members are among the busiest people in Suffolk government.
Its 235-page report on the Bellone proposed budget (available on the Budget Review Office’s website) also points to “issuing debt to pay for operating expenses” referring to the Bellone SCAT scheme. Among other issues, it cites the shifting to later payment or “deferring expenses” of benefits the county has agreed to pay police. It raises the plan for “borrowing from the NYS [New York State] Retirement system.” It speaks of the county “relying on one shots”—sale of buildings or land that can’t be repeated.
“Our concern here is that we may be reaching a point where these types of funding measures may no longer be available at needed levels,” says the Budget Review Office.
A big bind is that Suffolk County government has been relying more and more on the sales tax for revenue. Before1969, when Suffolk County government instituted a sales tax, it was financed largely from the property tax and fees. Now, as the Budget Review Office report states, the “sales tax is Suffolk County’s single largest source of revenue.” Mr. Bellone’s budget, it continues, calls for $59.4% of the county’s General Fund to come from the sales tax in 2017.
“Despite its importance as a revenue source to the County,” it says, “the volatile nature of sales tax collections…greatly complicates the County’s budgeting process.”
Today “oil prices continue to negatively impact sales tax receipts,” says the Budget Review Office. “Sales of goods and services on the internet have also contributed to lost sales tax revenue for the county.”
“How are we able to provide services at needed levels when facing a structural deficit that is far in excess of $100 million in each of the past several years?” it asks, regarding how Suffolk government has been finding itself in a financial hole annually.
Mr. Bellone, a former Babylon Town supervisor, who took office as county executive in 2012, insists his 2017 recommended budget (1.5% higher than this year’s) is “tight but fair.”
He emphasizes in his budget narrative the reduction of more than 1,000 jobs in the county’s workforce. But Mr. Kennedy says many of these are “low-pay employees” while, for instance, of the 86 employees in the county’s Department of Economic Development, “many of them are getting six-figure salaries….Wherever they can plug in another hack, they will.”
The Suffolk Legislature will vote on changes in Mr. Bellone’s recommended budget at a meeting in Riverhead this coming Wednesday, November 9. The county executive can veto changes and the legislature can try to override his vetoes at a meeting on November 22 in Hauppauge. In December “warrants” are sent out—the basis for your tax bill.
There is sharp protest about the budget already among some legislators. Legislator Rob Trotta of Fort Salonga in Smithtown has said: “Suffolk County’s financial situation is a sinking ship.”