Dire straits

A grim fiscal outlook forces Sullivan County to retrench

By ANNEMARIE SCHEUTZ
Posted 6/23/20

MONTICELLO, NY — The county revenue figures at the Sullivan County town hall on June 15 town were sobering.

A potential state aid cut of 20 percent or more. Sales tax receipts down. Other …

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Dire straits

A grim fiscal outlook forces Sullivan County to retrench

Posted

MONTICELLO, NY — The county revenue figures at the Sullivan County town hall on June 15 town were sobering.

A potential state aid cut of 20 percent or more. Sales tax receipts down. Other funding sources down. 

2020’s adopted budget, county manager Josh Potosek said later in an email, “assumes $25.7 million in state aid.”  That translates into highway funding ($2.6 million), public health ($1.2 million), social services ($8.9 million), mental health and substance abuse ($5.6 million), early intervention and pre-kindergarten ($3.5 million) and more.

All of these could be 20 percent less.

And, it’s not just about state aid. “We are losing between $200,000 to $250,000 per month with the casino being closed,” Potosek said. “That is just the mitigation money we received,” which doesn’t include room tax or sales tax from the casinos.

The county budgeted $49 million in sales tax revenue for FY 2020. But “sales tax payments have been down between 30 to 50 percent for our last four payments,” Potosek said. (The county receives its sales tax revenue from the state in quarterly payments.) “We could approach a $7 to 10 million loss in sales tax revenue this year.” The budget’s executive summary notes that sales tax is the county’s second largest revenue source behind property taxes.

The total county budget is $233 million. 

Before coronavirus hit, sales tax had recovered since the Great Recession of 2008-09, Potosek said, but “we have faced diminished state aid in certain areas that had never gotten back to 2008 levels.”

In other words, the county has been working with a reduced pot of funding to begin with. 

Last month, state comptroller Thomas DiNapoli warned of “sweeping budget cuts that could affect essential services provided by the state, schools and local governments.” 

“Although most states had robust rainy day funds at the beginning of this fiscal year, they will likely not be a sufficient buffer for most states,” wrote Lucy Dadayan at the Urban Institute in May. It’s not just the lost sales tax revenue or even lower income taxes: States will contend with “drastic increases in unemployment insurance and health care spending and reductions in state tax revenues for the remainder of this fiscal year and the beginning of the next year.” 

The state and the county both pay a percentage of the total Medicaid bill. Those figures are not yet available.

Additional federal stimulus aid would make a difference, but that’s another unknown, so the county is doing what it can to cope with the present situation. 

Departments have been restructured with a projected savings of over $1 million (see restructuring sidebar), abolishing the Deputy County Manager job as a full-time position, shifting risk management to human resources and leaving the human rights director position vacant, among other changes. 

Temporary pay cuts of four percent for management making over $100,000 have been put in place, and elected officials have opted-in as well. This is expected to save $50,000. 

Of course, unless more aid comes through, the readjustments aren’t over. “Our primary goal is to restructure and become more efficient. This may mean merging of departments, and some employees may end up in new roles,” Potosek said. “We are looking at certain operations and functions to determine if there are other models that can operate with less dollars [but] still provide the same amount of services.”

“Although there is much uncertainty regarding the level and duration of the current downturn,” Dadayan wrote, “one thing is certain: the longest U.S. economic expansion on the record is now over.”

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