In Essex County, the political tension boiled over this past budget season. County leaders adopted a budget that increases the tax levy by 1.1 percent. That meets the state's property tax cap requirements. But the county's manager blasted town supervisors for using fund balance monies -- a strategy he described as unsustainable.
County leaders are trying to pivot to talk about next year's budget. But questions remain about how this year's budget will play out.
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This fall, Essex County Manager Dan Palmer proposed a 26 percent tax increase for Essex County, part of a multi-year strategy that he said would put the government on a sustainable path.
His plan would have avoided using big chunks of the county’s rainy day fund, known as the fund balance.
“If you deplete your savings account — then you’re going to have trouble paying your bills,” Palmer said. “And we’re really no different than that. Essentially, we’ve used fund balance to pay down hard costs, and it’s going to be more difficult as we move forward.”
But town supervisors shot down that approach and instead used the fund balance and a variety of strategies to cut the tax increase down to just 1.1 percent.
Palmer announced that he was retiring over the stand-off.
But late last month, North Elba town Supervisor Roby Politi asked Palmer to stay on, arguing that he made the decision to leave in the heat of budget talks.
“You know, it’s a very difficult job,” Politi said. “You’re asked to provide a foundation for the board. You’re asked to provide a direction. You’re asked to make proposals and so forth. And then, when you do, the board basically does what it wants. So at times it can be extremely frustrating.”
But tensions clearly remain.
“I thought, to be honest with you, the county’s integrity was at stake,” Douglas said.
Essex County Board of Supervisors Chairman Randy Douglas didn’t support Palmer’s reappointment.
“He had decided to leave, and I think we’re all replaceable. I think it got to the point where none of us were looking very good during this whole (budget) process. And I thought, at that time, it was in the best interest of the county.”
But a majority of the board disagreed withDouglas, and he said he respects their decision.
“Dan and I have shook hands and decided that we need to work together for the best interests of Essex County,” he said, “and I assured my colleagues and Dan Palmer we would do that together.”
But huge deficits remain.
Speaking at a county board meeting in December, Treasurer Mike Diskin told supervisors he was concerned about the level of services the county would be able to provide to residents.
Without big changes, he said he was worried the county wouldn’t be able to meet payroll and other expenses.
“It appears that there will be a hole of nearly $8 million going into the budget time next year,” Diskin said. “And believe me when I say that the outcome for 2014 is going to continue to be very bleak if we don’t do something. We truly feel we’re going to have to make some tough decisions on what services we can provide and at what level.”
Diskin said last week he doesn’t foresee any problems with cash flow this year, but if the county isn’t careful, it could become an issue in 2014.
The 2013 budget uses close to $7 million in fund balance left over from 2012, although lawmakers expect to restore some of that.
The county also hopes to receive $2.8 million in reimbursements from the Federal Emergency Management Agency, and another $4 million from the pending sale of Horace Nye, which has yet to be finalized.
The budget also includes projected revenues from an upcoming property tax sale.
Douglas said he’s confident all of that money will come through.
“I don’t think the revenues are unrealistic at this point,” Douglas said. “I feel confident in what we did. Do we still have to look at things? Absolutely. I believe that we have to look at consolidating positions, especially through attrition and retirement, and possibly seeing if there’s anywhere we’re duplicating services.”
County Manager Dan Palmer said he’s not worried about meeting revenue projections — he’s concerned about expenses continuing to outpace revenues.
“If you look at what’s going on — and I’m not just talking about county governments, I’m talking about both schools and towns — they’re essentially using their savings accounts, they’re using whatever available fund balance they’ve got, to get back to that tax cap,” Palmer said. “Ultimately, that’s going to explode on everybody.”
Palmer says if the county board called for more layoffs in departments like Social Services, Essex County could face monetary sanctions from the state for not meeting mandated work force levels.
“There’s certain services that we are absolutely obligated to provide, and if we fail to do so, there’s some consequences to be paid for that,” he said.
Meanwhile, Palmer says the tax cap law unfairly punishes counties likeEssex, where tax rates have been historically low.
He points to the fact that neighboring counties had much higher rates when the cap was implemented.
“Somewhere within that calculation should have been some recognition of, ‘What are the actual taxes being paid within these municipalities?’” Palmer said.
State Sen. Betty Little said the tax cap has caused problems for counties like Essex that have low tax rates and small fund balances.
She said state lawmakers are listening to those concerns, but she added that taxpayers wanted a control on rising taxes.
“It is what the people wanted, and it is what really had to happen to keepNew Yorkstate from being number one in taxes,” Little said. “That is a deterrent for people, companies, to come here when they’re bringing employees or moving people into the highest taxed state in the country.”
Essex County has also been pushing the state legislature for permission to raise the sales tax – a move that would close roughly a quarter of the county’s deficit. So far, that measure has faced opposition in Albany.