SUFFOLK CLOSEUP - Most Vulnerable Pay For Suffolk County's Financial Bind

By Karl Grossman

Suffolk County government is in a financial bind and is cutting county bus routes 

to save money. Suffolk County Transit routes to be cut on October 3 include the S71 between  the Stony Brook railroad station and Shirley, And Vanessa Baird-Streeter, assistant deputy county executive for public information, says “additional cuts may be necessary.”

There are no Smithtown bus routes being cut now, but could they in the future be on the county’s cutting block?

The elimination of the routes is a result of a shortfall in sales tax receipts—a result of Suffolk government’s increasing reliance for its income on the sales tax. Suffolk government is high on the list of county and city governments in New York State that have been depending on the sales tax. And it’s an unsteady source of funds. A whopping 58.9% of the county’s operating budget for 2016 is based on sales tax receipts—and that money has not been coming through as expected. 

The reason also involves transportation, ironically, as outlined in a just issued report from New York State Comptroller Thomas P. DiNapoli. For Suffolk as well as other areas of the state, his report says, the sudden drop in gasoline prices has caused significantly less sales tax money to be collected at gas stations. What’s been good for motorists is causing financial pain, especially for Suffolk government.

Suffolk County Executive Steve Bellone two weeks ago ordered county government to go into an “extreme austerity” mode because expected sales tax receipts have not materialized. There’s a shortfall of $78 million. Mr. Bellone issued a “notice of funding deficiency” and announced, among other cost-saving efforts, that all purchases of more than $250 in any county department would have to be approved by his budget office, and the elimination of eight bus routes. 

Suffolk County has had an outrageously limited public transportation system. It’s been a factor in highways in Suffolk, a county with a population now of 1.5 million, being congested with automobiles. A car-dependent culture has developed. 

It’s a horror show these days on many roads in Suffolk, particularly during rush hours, whether it’s the Long Island Expressway between Exit 64 and Route 112 in Medford to Exit 49 and Route 110 in Melville or even on roads in the less-populated eastern portion of Suffolk such as Route 27 and then County Road 39 and Montauk Highway from Southampton Town all the way out to Montauk. (As someone who worked for many years out of the Suffolk County bureau of the Long Island Press on Route 347 or the Smithtown Bypass in Hauppauge and enjoyed Veterans Memorial Highway and Route 347 as being free-flowing, rush hours on those roads now present quite a contrast.)

Importantly, not only do busses reduce auto traffic—they’re vital for people who can’t afford autos and for senior citizens who no longer drive.

After years of public advocacy, in 1980 Suffolk County Transit was created and through the years, with more advocacy, its system of bus routes has been expanded. It’s been not nearly enough but a start in reducing the car traffic that jams roads all over Suffolk making getting from point to point often an ordeal.

Aren’t there less important county functions that could be reduced? Being hurt here are Suffolk’s most vulnerable people.

Ms. Baird-Streeter emphasizes that the decision to cut the eight routes came after “careful analysis” by the county’s Department of Public Works. The routes chosen to be eliminated, she said, were found to have the fewest riders. By cutting them the county “will save $4 million on an annual basis” and, because they would be cut late in 2016, “$1 million this year.” She said about “in the future” possible “additional cuts may be necessary,” that “the Department of Public Works has already identified additional routes that may be necessary to cut to save additional money.” Further, she said “Suffolk County provides the largest local bus subsidy of any county in New York State.”  

Also, she Ms. Baird-Streeter said public hearings on the route eliminations will be held in the Suffolk Legislature’s auditoriums, in Hauppauge on September 8, and in Riverhead on September 9, both from 3 to 7 p.m.

How did Suffolk County get into this financial mess? It’s not a new problem. The county has been in financial difficulty for years. Indeed, every year since Mr. Bellone took office in 2012 he has declared a “state of fiscal emergency.”

The situation is having an impact on the county’s credit rating. Wall Street’s Fitch Ratings downgraded Suffolk County from an A to an A-minus rating in June. “The county lacks the reserves to address fiscal pressures in the event of an even moderate economic downturn,” wrote Fitch analysts.

The key source of the problem predates Mr. Bellone. When I started as a journalist on Long Island in 1962, the local revenue that financed Suffolk government came from property taxes and fees. That caused difficulty for Suffolk’s elected officials when people received their tax bills at the end of the year, saw a large increase and became, naturally, upset. This is despite the fact that the county property tax has always been a small portion of the property tax bill. In the property tax bills for 2016, for example, a countywide average of 68 percent was for school taxes and only 11.4% for “county purposes.” Using a sales tax affects citizens a little at a time.

In 1965, New York State began a sales tax—initially 2%. The state share is now 4%. And in 1969, the state allowed counties and cities to also have sales taxes. Suffolk’s sales tax started in 1969, also at 2% and now it’s 4.25%. An additional .375% percent of sales tax paid in downstate counties, including Suffolk, goes to the MTA.  So the combined sales tax total in Suffolk today is 8.625%

Counties and cities all over the state began using the sales tax increasingly to finance their governments—with Suffolk way up there. But the sales tax is undependable. When the “Great Recession” hit in 2008 and people cut their purchases big-time, Suffolk’s counting on the sales tax became especially impossible. 

The most recent reduction in sales tax receipts and its connection to what’s been happening at gas stations is documented in the just-issued report by Comptroller DiNapoli, himself a Long Islander, from Great Neck Plaza.

Mr. DiNapoli’s report is titled: “Local Sales Tax Collections Slow in First Half of 2016, Decline in Motor Fuels Price a Continuing Drag on Sales Tax Growth.”  It notes that “between 2014 and 2016 the price of gasoline declined. This decline likely contributed to local governments collecting…less in fuels sales taxes in the first half of 2016 compared to the first half of 2014.” It said “the decline in motor fuels tax collections from the first half of 2014 to the first half of 2016, isolated from other factors, caused the overall decline in sales tax collections.” Suffolk was among the state’s counties with a decline of “between 35% and 40%” in “motor fuels sales tax collections” during this period.

There is somewhat offset in that county government now pays less for gas for its own vehicles. But this doesn’t come close to offsetting the drop in sales tax receipts.  A county official also noted that there are limits to expenditures that the county can eliminate or reduce because many county services are “mandated” by the state. But, in contrast, bus service can be cut “because the county can” do it.