County Executive Robert P. Astorino Proposes the 2017 budgetNov. 10, 2016 - Westchester County Executive Robert P. Astorino today proposed a $1.8 billion budget for 2017 that preserves essential services, maintains the safety net for the county’s neediest residents and for the seventh straight year does not raise the county tax levy.

“This is a budget that says ‘yes’ to the diverse needs of Westchester by calling for no reductions in services, no cuts to non-profits, no tuition hike at Westchester Community College for the fourth straight year, no raiding of our reserves and no increase in taxes,” said Astorino. “It shows we can meet our dual commitment to providing essential services, while keeping Westchester affordable for our seniors, young people, families and businesses.”

The proposed 2017 budget holds spending flat and is still lower than when Astorino took office in 2010. Spending for 2017 is proposed at $1,810,739,132, compared to $1,803,048,909 for 2016, an increase of 0.4 percent. The 2010 budget was $1,818,985,383; $8 million more than what is proposed for next year.

Once again, Astorino has crafted a budget that operates within what he calls the two “goal posts” of no increase in the tax levy and no raiding of the unrestricted fund balance to pay for day-to-day expenses. As a result, the tax levy stays flat at $548 million, and the unrestricted fund balance, commonly called the “rainy day” fund, stays at just under $140 million.

Review the proposed 2017 county operating budget.

See the proposed 2017 budget presentation.

Protecting Taxpayers
This marks the seventh budget where Astorino has lowered or not increased taxes. A tax increase, he said, would be a step backwards in his efforts to make Westchester, which is the highest taxed county in the United States, more affordable. He pointed out that if the county had raised the tax levy just 2 percent, the level allowable under the state’s tax cap, the cumulative cost to Westchester taxpayers would have been $413 million – or $1,325 for the median homeowner since he took office.

“Not increasing taxes is not an abstract slogan,” Astorino said. “It’s real money in the pockets of real people – young people, families, seniors on fixed incomes and entrepreneurs trying to scrape together enough money to start a business or stay in business. By saying ‘no’ to raising taxes, we are saying no to the broken political model of asking taxpayers for more money every time revenues run short. That got us in the mess that I promised to fix and I’m sticking to the promise.”

Westchester’s tax levy went up 60 percent in the eight years prior to Astorino becoming County Executive in 2010.

Solving Budget Shortfalls
Key challenges for balancing the budget included flat sales tax revenues and rising health care costs.

For 2016, the county forecasted a 5 percent increase in sales tax revenues, but the numbers are expected to come in flat to 2015, or $20 million below the projection. Lower gas and energy prices are the main contributors behind the decline. Additionally, the county’s health care costs exceeded budget by $10 million for a projected total budget gap of $30 million.

The county was able to plug the 2016 budget deficit with two sources of revenue. The first is $15 million from the sale of its Austin Avenue property in Yonkers, which closed this year. The other half is coming from a favorable refinancing of its tobacco bonds. These bonds have rates that are very attractive to investors, which in turn can provide additional revenue to the county.

By applying these two sources of revenue to the 2016 budget, the county expects to close this year’s books without dipping into the reserves.

A New Long-Term Revenue Stream
Astorino’s visionary plan for the future of Westchester County Airport, announced last week, will save taxpayers more than $140 million, including a $111 million long-term revenue stream, as part of a 40-year public-private partnership with Oaktree Capital Management, L.P. The revenue stream has been set up as a series of annuity payments that will extend over the four decades of the lease.

The first year payment will add $15 million in new revenues for 2017, more than making up for the stagnant sales tax projections. For 2017, the county projects a 3 percent increase in sales tax, or $8 million less than the 2016 budget.

No Layoffs, No Reductions in Services, No Cuts to Non-Profits
Despite the financial challenges, the budget maintains Astorino’s commitment to preserving essential services. The budget calls for no layoffs, and funding to non-profits and libraries will be held steady at current levels.

Spending for the Department of Social Services (DSS), which administers the county’s safety net programs, is budgeted to increase by $7 million, topping the $600 million mark for the first time. This means there will be no cuts to the funding for child care, or a need to raise parent contributions from the current level of 27 percent, which is lower than New York City and many other counties around the state. Westchester’s program is also open to more applicants than most other counties. Funding will be at 2016 budget levels with capacity of 2,407 slots for the low-income program and 149 slots for the Title XX program, which is for families whose incomes exceed state and federal guidelines.

Transportation is also being protected. All of the Bee-Line Bus System’s current routes will remain intact as a result of more than $18.6 million in subsidies from the county budget. One change for commuters is that the monthly parking rate at the County Center is being brought up $5 to the level of other parking lots throughout White Plains.

Fees for county parks, including golf, are being held steady at 2016 levels.

Announced in August, tuition for the nearly 13,000 students at Westchester Community College will not increase for the fourth consecutive year thanks in part to the county’s $29.8 million sponsor contribution, which is a $500,000 increase over the previous school year.

Average Compensation for a County Worker Is More Than $134,000
The biggest single expense in the budget is employee compensation, which comes to $625 million or about 35 percent of county spending. The average salary of a county worker is $80,300, compared to $68,400 for private sector workers. Total compensation for county workers jumps to $134,100, when health care, pensions and other benefits are included.

Since coming into office, Astorino has worked to control the cost of fringe benefits, which amount to 67 percent of salary, by negotiating contracts that require employees to pay a portion of their health insurance. Seven of the county’s eight unions currently contribute to their health care, saving taxpayers about $5 million a year. The county’s largest union, the Civil Service Employees Association (CSEA), is the one hold out and rejected a proposal last week that was signed by its union president and chief negotiator. In 2014, the CSEA rejected a neutral fact-finder’s recommendation, which Astorino accepted, that would have included health care contributions.

AAA Credit Ratings Affirmed
Astorino used the occasion of his budget announcement to note that both Standard & Poor’s and Fitch reaffirmed Westchester’s AAA credit ratings, the highest levels, last month.

The ratings agencies also gave Westchester a “stable outlook,” as did Moody’s, which gave Westchester its second highest rating, AA1. No county in New York has a higher credit rating from the three agencies than Westchester, which means the county gets the most favorable interest rates on its borrowings.

“These ratings are a vote of confidence in how the county’s finances are being managed,” Astorino said.

While all three ratings agencies noted the challenges faced by the county, such as stagnant sales tax revenue and high pension and health care expenses, each agency praised the county’s careful management of its finances and expressed confidence that the administration would be able to protect against revenue shortfalls.

“We believe that Westchester has historically maintained strong operating flexibility, and we expect management will continue to strive to maintain its reserves over the next two years,” S&P said. “Our opinion of the county’s finances are also based on management’s recognition of its budgetary pressures – including rising fixed costs, ongoing contract negotiations, and sales tax revenue weakness – and recent efforts to mitigate those concerns.”

Unfunded Mandates from Washington and Albany Cost Westchester $915 Million
Unfunded mandates from the state and federal government remain the county’s biggest financial hurdle. Requirements from Washington and Albany will consume 75 cents of every dollar in the 2017 budget. The mandates cover a variety of health and social services programs, the largest being the county’s contribution to Medicaid at $210 million. New York is the only state that pushes large-scale Medicaid costs to counties.

The county’s complaint is not with the programs, but the fact that the county has virtually no say in how the programs are run and much the county is billed. Mandates from Washington and Albany will consume $1.35 billion of the 2017 budget. State and federal reimbursements will come to $435 million, leaving county taxpayers a bill for $915 million and only $460 million in the budget for discretionary spending for its own expenses, such as police, parks, roads, libraries, the arts and non-profits.

“Up until now, the deal from Albany and Washington has been two dollars from us, one dollar from them, and a contract you can never change or get out of,” said Astorino. “My sincere hope is that with the new administration in the White House next year, some constructive conversations can begin around how all levels of government can work together to build, deliver and pay for programs that are more efficient and affordable.”