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Putnam State of the County Address Reflective of Country's Recession
County Executive forecasts possible 22 percent property tax increase for 2009
by Margaret Sternberg
Departing from a customarily optimistic outlook, Putnam County Executive Bob Bondi's State of the County Address, subtitled "Hard Times, Hard Decisions," forecast difficult times for the county in the near future.
The March 12, 2008 address, while not entirely gloomy, called 2007 a fiscally "challenging" year, beset by declining county revenues and increases in mandated spending.
Mr. Bondi warned of a possible 22 percent property tax increase in 2009 if other County revenue did not keep pace with a projected spending increase of $7.8 million that would keep services at current levels. That increase, he said, is driven by mandated costs, including contractual wage increases, health insurance, energy costs and mandated program costs. Mr. Bondi added that he wanted to work with the County Legislature to hold the 2009 property tax increase to no more than 5 percent.
The speech regularly attributed many of the County's woes to the national economy, citing a decrease in new home sales within the county and a concomitant decrease in "mortgage tax and other fees…the County receives" when a house is sold. The county, however, only acts as a conduit for mortgage tax fees, all of which are distributed to the towns and villages in which the sales occur, so that it is those communities which receive less mortgage tax revenue when home sales decrease.
The county has also seen a sharp rise in the number of foreclosures, with 180 houses having been foreclosed in 2004 to 428 houses in 2007 and 80 foreclosures having taken place in the first two months of 2008.
Earlier this year, the County was advised that its second largest employer, Watson Pharmaceuticals, planned to leave the County by the end of 2010, resulting in a loss of about 600 jobs as well as the revenue that is generated by monies spent by those employees. Another large employer, Guideposts, laid off 65 workers on March 14.
Although Mr. Bondi suggested that the economic downturn might also manifest itself in decreased sales tax revenue based upon people shopping less, as of September 1, 2007 the County has been collecting .25 percent more in sales tax, and January and February 2008 numbers show that the County is now meeting its sales tax revenue projections. County sales tax revenue for 2008 is projected to be about $48,774,000.
In 2005 and 2006 the County fell $1.8 million and $4 million short of its sales tax projections. In 2007 it exceeded projections by $144,000 only because, according to Legislature Chairman Tony Hay, the .25 percent sales tax increase was in effect the last four months of the year, counteracting what was projected to have been another deficit.
Separately, the lack of "smart, environmentally safe commercial growth" was cited as hurting County sales tax revenue, and Mr. Bondi blamed "territorial town boards, special interest groups and misinformation about projects and proposals" for the problems.
Cost shifts in state-mandated social services programs, which now change the burden of payment from the state to the County, pose more fiscal problems. County costs for the Safety Net program are expected to increase by at least $324,000, and County projections are for an additional $71,000 to $85,000 in spending for the Temporary Assistance for Needy Families program.
Some good news from the County was the increase in the undesignated general fund balance from $8.764 million at the end of 2006 to $10.8 million at the close of 2007 - a 23.724 percent increase that, Mr. Bondi said, would be viewed favorably by the County's bond rating agencies, possibly improving the County's bond rating and thereby decreasing the interest rates at which the County can borrow funds.
In cost-saving measures, the County received two, separate $25,000 state grants, one of which would be used to study the feasibility of implementing a county-wide assessing program that would consolidate services that are now provided on the town level, with each town employing their own assessor and requisite staff. According to Mr. Bondi, if practicable, it would be expected to reduce the local tax burden while increasing efficiencies. The other grant will be used for a study on implementing a county-level database for tax collection.
The elimination as of March 31 of the County's recycling program, which it has said is duplicative of town recycling programs, is expected to save $227,000, representing 75 percent of the $303,000 that had been budgeted for the program for the entire year. Mr. Bondi said that other services, such as Hazardous Waste Days, may be expanded.
In a bow to the Legislature, Mr. Bondi offered a proposal that would allow for the hiring and retention of new County attorneys and legal assistants to do the work that had been done by outside counsel who had discrete areas of expertise. Mr. Bondi had been repeatedly criticized by Legislators for the outside counsel line of the budget.
Dispatching services at the 911 Center in the Bureau of Emergency Services Center and at the Sheriff's Office will be consolidated to reduce staff.
County Executive Bondi also used the Address to warn outside agencies that they not only should not expect the same level of funding as last year which, in most cases, was level from the prior year, but that they should anticipate a 20 percent cut in funding. Elimination of the Putnam Area Rapid Transit (PART) bus is on the table as is raising the fare for the Cold Spring trolley from 10 cents to one dollar.
The County is also in the process of re-evaluating their contract to plow and salt state owned roads and has verbally advised the NYSDOT that they are considering not renewing this contract. Anita Gilbert, Chief Deputy Commissioner of Finance, said the Highway Department is currently working up those figures, including the amount saved, and that they had not yet been provided to the Finance Department.
Despite the overall downbeat picture, Legislature Chairman Hay said, "It's probably the first State of the County that was a pure State of the County in a long time. It reflected the true state of the County and was accurate. The County Executive didn't talk about new initiatives or bringing out new programs. Times are tough, and the speech reflected that; it was a good speech."
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