Nov. 15, 2001 

SPANO PROPOSES “DIFFICULT BUT RESPONSIBLE” SPENDING PLAN FOR 2002

County Executive says budget protects people, preserves county’s fiscal integrity;
Cites forces beyond his control -- recession, events of Sept. 11 and state mandates -- for first tax increase during his administration

Saying he would not sacrifice the well-being of Westchester residents for political expediency, County Executive Andy Spano today proposed a 2002 budget that calls for $1.3 billion in spending, preserves county services and maintains bus fares. 

However, due to the recession, security issues relating to the events of Sept. 11 and continued skyrocketing costs of programs mandated by the federal and state governments, the budget would raise county property taxes for the first time during Spano’s tenure in office. 

“If it weren’t for the all of these things happening at the same time, we could have avoided a tax increase for 2002,” Spano said. “I regret that I am not able to meet my goal of decreasing taxes for the fourth year in a row. We are faced with a slowing economy and recession, increases in costs for security and public health as a result of September 11th, and cutbacks in state and federal aid at the same time that the costs to us of programs mandated by these governments are soaring.” 

The budget has no new programs except in public safety, and the funding for all existing programs was not increased, except for those that provide food for the hungry. 

Spano’s proposed $1,314,334,066 budget is an increase of $89.4 million over this year’s budget. Mandates from the state and federal government account for $783.5 million of the 2002 budget, of which $431.5 million comes directly from local sources, as opposed to state and federal aid.

The property tax levy required is $370.5 million, or an increase of 9.5 percent. The proposed tax levy for 2002 is about $5 million more of what it was in 1998 when Spano took office. Spano had cut the county tax levy in 1999, 2000 and 2001. 

Spano said of the proposed 2002 budget, “This is an honest and responsible budget, one that preserves the county’s fiscal integrity, one that does not harm people for political expediency, one that does not put off to others the issues that we must tackle today, and one that does not erode the quality of life that drew so many of us to this great county.” 

“This is about people,” Spano said. “I will not forgo the quality of life that makes Westchester special. I will not add to the troubles of those who have already been affected by the worsening economy. I will not compromise when it comes to protecting the health and safety of our people. In times like these, everyone pays a price. We, at the county level, have to make the hard choices. I believe we have done that and done that responsibly. We continue to tighten our belts and control spending wherever possible. We have continued the fiscal restraints of the past, and we are prepared for the challenges of the future.” 

He added, “The facts are simple: Our mandated costs are up tremendously. Our revenues are down. Our services must be maintained and in the case of security, enhanced. Fortunately, because we were prudent and fiscally responsible in the good years, we will get through the lean years.”
Spano noted that his budget calls for the county to use much of a $40 million “rainy day” fund set up in his previous budgets. Spano will ask the county and state legislatures to give the county authorization to increase the county’s sales tax a quarter of a penny to replenish the rainy day fund and provide for future property tax stability. 

EXPENDITURES
The $89.4 million gross increase in expenditures fall into four categories: mandated costs; public health and safety; fixed expenses; and discretionary expenses for programs that, if reduced, would drastically hurt those who need the most assistance. 
Mandated costs – This is the largest category by far, accounting for $55.4 million of the $89.4 million increase in expenditures. Overall, the county expects to spend $783.5 million gross on programs mandated by the state and federal governments next year -- mandates that continue to grow each year.
“We have no control over these mandated costs except to pay the bills,” said Spano. 

Mandates include services for young children with disabilities, up $12.9 million, to $101.6 million, of which $43.4 million comes from Westchester taxpayers; Medicaid, up $13.7 million, to $170.7 million in 2002; and retirement expenses, up $8.4 million, to $10.7 million.
Also, the county has to pay next year $9 million in finance charges related to the ongoing reconstruction of the county’s Courthouse, a project mandated by the state. 

Public health and safety – As a result of the continuing threat of terrorism and bio-terrorism, this budget proposes an increase of $13. 4 million for public health and safety. This includes 28 new positions related to labs and research (some costs of which will be reimbursed by New York City), emergency services, public safety, public health and the criminal justice community. It also includes 78 new police officers, 55 of whom will be stationed at the airport for 10 new posts. To offset this cost, the county will ask the federal government for funding assistance. 

“For the past four years, we have been successful in reducing the size of county government with 100 fewer employees,” Spano said. “As I have said previously, this year is an exception in many ways, but I will not compromise on the health and safety of our residents or our employees.”
Fixed -- Debt service costs to the county are increased by $4.9 million, as the county acquires parkland and continues to maintain its valuable infrastructure by not postponing important maintenance projects. Also, directly due to the events of Sept. 11, the county’s property insurance costs will rise $500,000, to a projected $1.3 million. 

Discretionary – This category has a proposed increase of $15.2 million, a third of which will go towards maintaining the county’s Bee Line bus system and maintaining bus fares.
“We have the reputation of helping those who need it most, and for that reason, in spite of the loss of $2.4 million in state and federal transportation funding, I have chosen to keep bus fares and service at the current level,” Spano said. “Also, responding to increased demand for our ParaTransit service for the elderly and disabled, more money will be spent on that service. The rest of the discretionary increase goes toward maintaining and enhancing our parks system, salary and health benefits for our employees and the continuation of programs for seniors. 

He added: “The word discretionary is a misleading word. Is it discretionary to spend money on day care that helps working families and in many cases keeps them working and off the welfare rolls? Is it discretionary to maintain our bus service to get people to work who might not have any other transportation? 

Is it discretionary to maintain and have a park system that is enjoyed by Westchester residents of all ages, all walks of life? I think not.”

REVENUES
The county budget relies mainly on revenues from property taxes, sales taxes, hotel taxes, state and federal monies and investment income. 

Property taxes – Due to skyrocketing mandates, the budget proposes a 9.5 percent increase in the county property tax levy – the actual amount collected in property taxes. In Spano’s previous three budgets, this levy was reduced 7.8 percent. County taxes represent about 20 percent of a property owner’s bill, the remainder being school, local and special district taxes. The actual effect of the proposed tax hike on specific property owners varies from community to community due to different assessing practices in each municipality. 
Sales tax –The projected sales tax revenue for 2002 is $263.3 million, the same as in 2001. Sales tax collections have been directly affected by the events of Sept. 11. 

Two years ago, Spano established a rainy day fund to use to offset unanticipated shortfalls. That fund currently has $40 million in reserve. The fund was established to deal with bad times and is being used in the 2002 budget. Spano said he will ask the county Board and the State Legislature for permission to raise the county’s sales tax by 0.25 percent, and that, if approved, the projected $36 million generated will go to replenish the county’s contingency fund. “In this way we will not mortgage our children’s future because of the unforeseen events that have caused the crisis today,” he said. “This will provide future tax stability.”

Federal/State aid – The aid from these two levels of government has not kept up with the pace of new mandates from these governments. Even before the events of Sept. 11, the state had adopted a budget with $5.2 million in cuts in aid for Westchester, and the county has little confidence now – with the state facing a $9 billion deficit of its own – that these cuts will be restored. Added Spano, “Because of the worsening economy and the cost of the war, we can’t rely on the federal government.” 

Hotel tax – Hotel tax revenues are projected at $4.95 million, a decrease of $150,000, due in part to the events of Sept. 11.

Investment income -- Due to falling interest rates, this income is down by $4.4 million, almost by half, to a projected $5 million. 

COST-SAVING MEASURES
Spano announced the following cost-saving measures:
  • The Playland Ice Casino will be closed at the end of the hockey season in the spring. Personnel will be moved to other jobs within the parks system. The closing will save $793,000. As part of the Playland master plan process, a decision will be made as to what to do with the casino in the long term. 
  • Salaries of all non-union employees in the county will be frozen. 
  • The hiring freeze announced last month will be continued. 
  • All travel, meals and educational training will be cut 10 percent. 
  • There will be no additional funding to any contract agency, except for those non-profits that deal with hunger (Two agencies, Food PATCH and the Coalition of Food Pantries and Soup Kitchens, will each see their funding increased to $100,000, from $60,000.)
  • In the Department of Information Technology, outside contractors who earn between $105,000 and $144,000 annually will be replaced with employees who earn an average of $67,000.
  • No new programs except in public safety. 

 


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