Westchester County Board of Legislators
800 Michaelian Office Building
148 Martine Avenue
White Plains, New York 10601

Dear Honorable Members:

Like taxpayers throughout the State, Westchester County taxpayers continue to feel the harsh effects of State Mandated Programs. As I said last year when I released the 2003 budget, and as I predicted for 2004 and 2005, the costs of these State Programs are driving up County property taxes at an alarming rate.

It is ironic that the reason Westchester County is feeling these costs so drastically is because we have a well managed, lean government that has consistently reduced spending and eliminated fat. There is no bloated bureaucracy. Therefore, when State Mandates escalate, we have no waste to cut to make up the difference. The choice then becomes a large increase in property taxes or a massive decrease in County services and programs.

In 2004, County government will get a bill from the State of New York that totals $1.015 billion. This is a bill for programs and services that are imposed on Westchester taxpayers, over which the County Government has no control.

If we keep the cost of County discretionary programs level this year, (continuing the $70 million cut in spending we made last year) it would mean an increase in County property taxes of 36%.

This is unacceptable. I do not want to hurt our homeowners with this kind of property tax increase. Since I cannot reduce the $1 billion dollar cost our taxpayers have to pay for State Mandated Programs, my only option is to cut County discretionary spending further. This gets harder to do each year, because there is no waste in this County government.

Since I have taken office we have:

• Eliminated and consolidated departments to achieve budgetary efficiencies and used information technology to increase services while reducing costs.
• Renegotiated contracts for Westchester Medical Center services and with Liberty Lines for purchase of the Yonkers Bus garage for a total taxpayer savings of $185.5 million.
• Reduced the amount of rental space, consolidating functions in county owned space at a lower cost.
• Reduced the size of the county auto fleet and reduced the number of assigned vehicles.
• Reduced to a bare minimum all equipment, travel and educational training accounts.
• Reduced funding to contract agencies.
• Reduced overtime.
• Transferred some parks operations to local communities eliminating a cost to the county taxpayer.
• And with this proposed budget, we will have reduced the county workforce by 12.5% or 631 authorized county positions, even while adding new positions in Public Safety and Emergency Services after 9/11.

The budget I present to you today shows a tax levy of $411,572,306 for a county property tax increase of 2%. It shows massive cuts in county spending that total $29.8 million. It shows the abolishment of 319 positions. Despite this, the overall Operating Budget for 2004 has increased by $77,072,689 over last year for a total of $1,397,611,829. Of this amount, only $382,625,040 is for County programs and services.

We have a State Mandate problem of the highest magnitude. In 2004, we face:

• An increase of $16,420,000 in our Medicaid bill from the State. The total cost of Medicaid to our taxpayers for 2004 is $220,570,000. Without the increase earlier this year in Federal Aid it would have been $226.9 million.
• An increase of $6,564,431 in all other relief accounts mandated by the State.
• An increase of $14,569,357 in the State Mandated Retirement System.
• An increase of $4,595,900 (a 89% increase) in State Mandated attorney's fees for indigent cases.
• An increase of $2,288,287 in State Mandated Services for Children with Disabilities.
• The Problem continues….. We face other fixed costs that we are obligated to fund:
• An increase of $10,113,840 in Employee Health Benefits
• An increase of $6,292,973 in 6-N and 6-J, which are our self-insurance funds. This results from the Legislature's decision to use the catastrophic reserves to fund the 2003 projected losses and the assumption of medical malpractice exposure for Correctional Health.

And the Problem goes on…. We face:

• A revenue loss of $21,755,196 in fund balance
• A revenue loss of $ 13,926,670 in tobacco settlement (Due to the downgrading of RJR, these funds have been placed in a locked box and are unavailable to us as of now.)

The combination of the mandated expenditure increases and lost revenue results in a tax levy of $549.9 million or an increase in the county property tax of 36%.

Faced with the possibility of this enormous tax increase for our residents, I have proposed a budget that I feel is the "best" of many bad options. The principles that have guided my decision are the very same principles that have been the core of this administration since I took office:

We will not accept options that place an unfair burden on homeowners.

We must continue to protect our children, seniors and other vulnerable residents.

We must do all that we can to preserve the quality of life we want in Westchester.

Based on these principles, I have taken the following actions. Needless to say, I wish that they would not have been necessary. They are painful, because they affect our dedicated workforce, and they cut programs that this county is used to, but, with the escalating costs of State Mandates, can no longer afford to fund. Therefore, my proposed 2004 budget calls for:

The elimination of the following programs for a savings of $6,915,144 and along with them, the elimination of 81 positions.

Positions/Expense
Program Abolished
Family Planning 9
Children's Dental 6
Public Health Info. 5
Tobacco Enforcement 6
Mosquito Control (larvacide is kept) 7
Environmental Health Staff 6
New Rochelle D.O. 16
Services for Children with Disabilities 15
Willson Woods Pool Closing (for construction) 3
Employee Assistance Program 4
Public Safety
(Major Case Squad) Overtime Reduction
(Violent Crimes Task Force) Overtime Reduction
Probation (staff reduced) 4
White Plains to Manhattan (Express Bus Route) Transit Oper. Expense
Playland Bus Route Transit Oper. Expense
Various Other Route Reductions Transit Oper. Expense

• The "outsourcing" of the following programs for a savings of $1.3 million and the elimination of 110 positions. The services to these individuals and families are not being eliminated. We believe that these services can be provided by alternative methods at a savings to our property taxpayers.

Positions/Expense
Program Abolished
Employment 34
Housing 18
Foster Care 7
Preventive Services 51

• The abolishment of an additional 128 positions for a total of 319 positions. Of the total, 236 are currently filled and are being analyzed for compliance with Civil Service Provisions for a combined savings in salary and fringe benefits of $23,884,845.
• In addition, we have reduced spending $4.3 million through cost efficiencies, operational changes, and overtime reductions.
• And, saved $1.5 million in bus route reductions.

As a result of these actions, we have been able to reduce county spending by $29.8 million. This budget, however, will not increase bus fares, will not create waiting lists for day care, will not cut senior programs, and will fund all contract agencies at last year's levels.

Even with these reductions in personnel and program costs, the increase in the county property tax would still be too high-- 25%. However, there are simply no further cuts that can be made to county spending without irreparably harming the safety and quality of life for our residents.

I do not want to see county government dismantled any further. Since there is nowhere else to go to reduce costs, we must look, as we tried to do last year, for new revenue. Along with fee increases in the Parks Department, Labs and Research, Health, and Human Resources, I am proposing, once again, an increase in the sales tax of one cent on the dollar. This would generate $87.9 million of additional sales tax revenue over 10 months.

Moreover, this budget is also based on our receiving an increase in the vehicle registration fee. If the county portion of the fee were raised from $5 to $10 (and from $10 to $20 for larger vehicles) a year, it would generate $4.5 million over 10 months. As with the sales tax, we need the State Legislature to give us the authority to increase this revenue source.

With this additional revenue the county property tax would increase by just 2%.

My staff, the Budget Office, and I have been working on this budget ever since we passed the last one. We knew then that this would be a difficult year. Escalating State Mandated costs are affecting almost every county in this state. Despite our Triple A bond rating and our growing economy, which is the envy of those around us, we are not immune. Despite the cuts we have made for the past six years, we are not immune.

We are not immune, simply because our sales tax, which is the lowest in the State, does not generate enough revenue to pay for State Programs. Nassau County has a 4.25% county sales tax and collects $901 million. Suffolk has a 4.25% sales tax and collects $1.035 billion. We have a county sales tax of 1.8% and collect $279.6 million. In surrounding counties, their sales tax pays for a greater portion of their budget. In Westchester, we should not be asking our property taxpayers to pick up more of this burden.

We are working as hard as we can to get the State Legislature to give us the relief they have given to other counties. If they go into special session this year and give us authority to generate this new revenue for a full 12 months, then layoffs and program cuts would be scaled back.

However, if we don't receive these new revenue streams by next year, your Board will not have easy options. There will either be a property tax increase of 25%, further cuts in county government, which will, in effect, dismantle it, or something in between.

If this unfortunate alternative comes to pass, there is a supplement to this budget, which lists massive cuts to county services and the savings each will provide. They would render our government useless and our residents unprotected. They would destroy the very fabric of our quality of life. Non-profit agencies that do so much to protect seniors, women, and children would, in all likelihood, disappear due to lack of funds. Everything we have worked so hard to achieve would be imperiled. We would become, very simply, a caretaker for State programs.

Your Board and my office have worked together for the past six years to reduce the cost of County government and bring fiscal stability to our taxpayers. With this budget, our workforce will have been reduced by 12.5%, despite the fact that after September 11th we added more police and emergency services personnel. Our residents are better protected today, than ever before. We have creatively used funds to add to our open space inventory and to encourage affordable housing. We have been a model to the country in our programs for seniors, women and children. And, despite all odds, we have kept taxes down.

I am hopeful that we can meet the challenges ahead by working in a bi-partisan fashion that our residents deserve. And with the assistance of our State Legislature, I am confident that all the things that we have worked so hard to achieve---will continue.

Respectfully submitted,

Andrew J. Spano
County Executive