‘These policies and decisions have created a fiscal mess for Westchester County.’ County Executive George Latimer
By Dan Murphy
An audit of the Westchester County budget and its finances, prepared by independent auditors O’Conner Davies, showed that at the end of 2017, the county had an operating deficit of more than $32 million. The budget shortfall was accumulated by then-County Executive Rob Astorino, who presented budgets to the County Board of Legislators for eight years with a 0 percent property tax levy increase.
Astorino’s “no new taxes” pledge, which was welcomed by a clear majority of Westchester homeowners and taxpayers who pay the highest property taxes in the country, is now being viewed and analyzed as bad practice. While Gov. Andrew Cuomo helped implement a 2 percent property tax cap for all local governments and school districts (including Westchester County government), Astorino took it one step further, passing budgets with 0 percent tax increases year after year, with the approval and consent of a majority of legislators on the county board.
Union contracts, capital improvements and other necessary expenditures were ignored under Astorino, according to Democratic legislators and County Executive George Latimer, who defeated Astorino last November.
In a statement Latimer, said:
“As anticipated, the 2017 Westchester County financial statements – the Comprehensive Annual Financial Report – has been finalized for 2017, showing an operating deficit of $32,178,097 in the county’s general fund.
“Our administration took office Jan. 1, 2018; we have inherited this 2017 deficit from the prior administration, and it negatively impacts our current 2018 budget and projections for the 2019 budget, which will be in preparation beginning this summer. This deficit has been presumed for the last few months; the prior county administration budgeted $15 million in revenue tied to the long-term sale of the airport, a policy that was rejected in consecutive years by the Board of Legislators.
“The prior county administration negotiated and closed contract settlements, the costs of which were not fully budgeted, with the Westchester County Police Officers Benevolent Association, Westchester County Police Officers Benevolent Association Superior Officers Unit, Westchester County Corrections Officers Benevolent Association and the Westchester County Corrections Department Superior Officers Association. These four contracts, settled in late December 2017, failed to cover retroactive costs in 2017 and costs in the 2018 budget. At the same time, the prior administration failed to come to agreement with the Civil Service Employees Association, which covers the vast majority of county employees, extending their period without a contract to seven years. This is a huge expense to the county with no provision in the 2018 budget.
“Promises made under the past administration included a commitment to freezing property taxes for nearly a decade; failing to fund agreed-upon labor contracts for some employees, while allowing the labor contracts for other employees to languish and a future obligation to grow exponentially: closing budget gaps with one-shot actions or proposed monetization of public assets without a public discussion or agreement upon the policy impacts of such proposals; and decimating the workforce with dramatic reductions in force, placing reliance on outside consultants and contractors.
“This new administration will deal with this crisis in the way we have worked over our first six months in office – with openness and transparency, with a cooperative spirit to county legislators and all our colleagues in state and local governments, and with a willingness to make tough decisions in order to secure long-term fiscal health.
“We will be developing, over the next 60 days, a game plan to address the current shortfall for 2017 and 2018, even as we plan the 2019 budget. We will be reaching out to meet directly to the bond rating agencies to deliver a plan for addressing the elements of the current situation. We will speak with the governor and the State Legislature to outline the assistance we need from their authority to get us through this period. We will meet with the press to answer questions about where we are, how we got there, and where we go from here. The people of Westchester County need to know that we did not get into this situation overnight, and it will take time to chart us on the responsible path that will get us out of this crisis. I have faith and confidence that the people of this county will be able to discern rhetoric from reality.
“These policies and decisions have created a fiscal mess for Westchester County.” (End of Latimer statement).
At the press conference announcing the financial review of the county’s books for 2017, Nick DeSantis of auditors O’Conner Davies broke down the numbers. He explained that $15 million of the $32 million shortfall came as a result of the county not moving forward with a plan to privatize Westchester County Airport, which Astorino had called for, and for which money was included in his budget plan. The Board of Legislators rejected the idea twice, and Latimer’s administration is reviewing the plan again.
DeSantis also explained that the county has $32 million in revenues that it can ask the taxpayers for without going over the property tax cap next year, including an additional $10 million in unused taxing authority from the Astorino years.
DeSantis threw out a number – 5.9 percent – which could be a possible property tax increase, which Latimer immediately tried to defuse at the presser when he said: “Let’s be clear, nowhere here have we discussed a property tax increase. Anyone who does is playing politics with our finances. In November we will know. This doesn’t trigger any increases today.”
DeSantis also said the county could ask for an additional half a percent sales tax increase, but that would require state approval and not be available until next year. That sales tax increase would generate $70 million, but would have to be split with local governments. He ended by saying that the county’s finances have not been that bad for many years – not even during the recession of 2008.
The county’s largest union, CSEA, with 4,000 members, is without a contract and has been for several years. Latimer is negotiating with the union and cannot discuss the terms until a deal is reached, but DeSantis explained that a 1 percent increase in the CSEA members’ contract would cost the county $48 million, and $16 million in the current budget.
Latimer was conciliatory, peaceful, and not interested in laying blame at the press conference. “We will not hold any member of the Board of Legislators accountable, we are trying to create a new relationship,” he said.
When asked about Astorino, Latimer added: “We had a campaign and litigated those issues. I’m not looking back but moving forward.”
Latimer also accepted responsibility for closing the budget hole in November when he presents his first county budget. The county executive also identified several cost-cutting measures that his administration is reviewing, including contracts to private vendors including Liberty Lines and at Playland, moving out of leased county office space into county-owned office space, shared services, collecting revenues from hotel occupancy taxes and other taxes aside from property taxes, and energy reductions.
The county executive joked that his administration had looked at the state’s unclaimed funds website and found $20,000 in county government funds. “It shows the intent of this administration to fix this and solve the problem presented to us,” he said.
Latimer also made it clear that he would not immediately make a knee-jerk reaction and raise property taxes at a large amount when the serious budget negotiations begin in the fall and early winter. This was refreshing to hear, politically wise, for Latimer to say to the many voters in Westchester who cast a vote on two occasions for Astorino but last year cast their vote for Latimer.
Latimer also didn’t seek to blame the legislators that voted with Astorino on county budgets over the past seven years. Let us remember that Deputy County Executive Ken Jenkins, while a member of the BOL, proposed and voted on a budget with a 2 percent tax reduction.
Most of the voters, homeowners and taxpayers in Westchester wanted the tax relief that Astorino gave to us. Now with Latimer’s help, and not scorn, we are coming to the conclusion that this year and maybe beyond, we will have to pay for that relief.
The City of Yonkers faced a similar budget dilemma last month, after adopting budgets in prior years that were below the tax cap. The bill came due and this year’s property tax increase was 6 percent.
County Board of Legislators Chairman Ben Boykin added: “For years I’ve warned about structural fiscal imbalance and repeatedly voted against budgets that contained one-shot revenues and borrowing, with services reduced and investments neglected, under the guise of no taxes for six years. We now embark on a new course with new leadership on the county board and a new county executive. We may have some difficult solutions ahead, including belt tightening and costs to pay.”
Others couldn’t resist the swipe at Astorino.
“As many of us in the Legislature warned, the prior county executive’s politically-motivated ‘no tax increases’ ploy did nothing more than push off to the future costs that we are now faced with paying today,” said Majority Leader Catherine Parker. “Our job is to fix this mess and responsibly restore Westchester’s financial position, while continuing to ensure that county’s roads, parks and essential services support the quality of life in Westchester.”
