MONTICELLO, NY—Legislator Joe Perrello and others poked fun at the sparse attendance at a recent public hearing on the county’s budget—until things got serious.

Michelle Huck, the assistant Sullivan County manager, announced that the cost of employee insurance had increased by a much greater sum than the legislature expected, or had budgeted, for 2024. 

The cost of family coverage under Excelsior insurance, for example, increased by almost 50 percent. That’s far more than the 7.5 percent increase anticipated in the budget.

The legislature held two public hearings last week on the 2024 tentative budget. It now must find nearly $2 million to cover the unexpected insurance increase, representing 0.7 percent of the total tentative $280 million budget. 

Perrello insisted the legislature not use the fund balance to cover the extra cost. He suggested raising taxes. 

Legislator Nadia Rajsz agreed.

Taxes will need to be raised by about 1.7 or 1.8 percent to cover the unexpected cost, according to vice chair of the legislature Michael Brooks. 

“I think every town is having the same issue this year,” said Perrello.

“They are, that’s correct,” said legislator Luis Alvarez.

Pain felt statewide

The New York State Department of Financial Services, which approved rate increase requests for 2024, whittled down the requested increases significantly. Yet certain requests, like one from Excellus on the individual market, was reduced only to 12.2 percent from the 15.2 percent increase requested, which still represents a significant rise in costs. See the full list online at tinyurl.com/yps3va6n.

Debbie Ashford, the North American chief actuary for Health Solutions at Aon, a large provider of consulting services for the health care industry, told CNN that she attributes the jump in insurance costs to inflation, the effects of which are often delayed in the health sector because of multi-year contracts between insurers and medical providers. In other words, insurance companies are increasing costs to cover the uptick in medical costs caused in recent years by inflation.

Ashford also cited the more regular use of medical services since the pandemic and the increased use of more-costly specialty drugs.

Dan Hust, Sullivan County communications director, told the River Reporter he believes the county didn’t receive notice of the increase until November 30, 2023.

Sales taxes haven’t been raised in Sullivan County for almost three years, Perrello noted. Taking the cost out of fund balance would create a deficit that would have to be dealt with next year.

Frequent public commenter Ken Walters was the lone resident to weigh in. He favors raising taxes. “Let’s not kick it down the road by taking it out of the fund balance,” he said.

The legislature intends to adopt the budget on December 14, when it will decide how to cover the shortfall—whether by tax increase, use of fund balance, or a combination of the two, said Hust in an email to the River Reporter.

Editor's Note:  This story was corrected on November  12 to correct name spelling