July 13, 2017 - Taxes flat, credit rating strong and Westchester County ended the 2016 fiscal year with a $1.5 million surplus, according to the recently released, annual audit of the county’s financial condition.
Called the Comprehensive Annual Financial Report (CAFR), the 260-page document includes an analysis of county finances along with important information on revenues, debts, reserves, demographics and economic conditions in Westchester County. It is prepared by the County’s Department of Finance and audited by the certified public accounting firm of PKF O’Connor Davies.
“Since taking office, we’ve worked hard to deliver essential services and a balanced budget – all while either lowering or holding the county tax levy flat for seven consecutive years,” Astorino said. “Our latest financial results show that the public benefits when county government couples fiscal discipline with a commitment to finding new ways to get the most value out of every hard earned tax dollar.”
Positive economic indicators highlighted in the report include:
- An unemployment rate of 4.1 percent in April of 2017, which is below that of New York State (4.3 percent) and the national average (4.4 percent).
- A steady growth in wages to $29.2 billion in 2015, up from $25.4 billion in 2010, with earnings gains in employment sectors such as finance, construction, real estate, health care and education.
- The highest credit rating of any county in New York, which translates into lower borrowing costs. Westchester maintains a AAA bond rating from Standard and Poor’s and Fitch Ratings and an Aa1 rating from Moody’s Investors Service.
On the expense side, the county has continued to control spending. The $1.8 billion budget in 2016 was actually less than it was in 2010, $1.82 billion, all while preserving essential services. In fact, spending for the Department of Social Services, which provides the safety net for the county’s neediest residents, remained strong at $588 million for 2016, and is budgeted at $603 million for 2017. Last year’s budget also contained no layoffs or cuts to not-for-profit agencies.
On the revenue side, the county has benefited from increases in sales and mortgage taxes and from the sale of surplus county properties. For 2016, the CAFR shows sales tax revenues increased by $6.8 million (1.4 percent) to $507 million; and mortgage tax revenues increased by $1.3 million (7 percent) to $19.7 million.
The county also realized tens of millions of dollars from the sale of surplus properties, including $5.4 million for 375 Executive Blvd. in Elmsford, and $15 million from the County Industrial Development Agency’s sale of vacant land in Yonkers to a developer who will be building a department store.
As a result of careful attention to both sides of the ledger, the county was able to end the year with a $1.5 million surplus, while simultaneously keeping taxes flat and paying down debt.
CAFR figures for 2016 show the county’s:
- General fund tax levy held steady at $548 million, which is down 2 percent from 2010.
- Debt dropped by $83 million, or 7.5 percent, to $1.02 billion, made possible by paying down $109 million and refinancing $26.4 million at lower interest rates.
- Total general fund balance, or so-called “rainy day” fund for emergencies, remained steady at $166 million and is up from $160 million in 2010.
The county amortized $4.4 million in 2016 as part of the state’s pension amortization program, down from a high of $42 million in 2013. The program gives local governments the ability to spread out the payments of pension obligations over several years rather than making the full payment in a single year. In 2013, the county’s pension bill for just that one year was $101 million. To put $100 million in context, that’s a 20 percent tax increase or 1,000 layoffs. Though entry into the amortization program was made reluctantly with Board of Legislators approval in 2012, it did present a viable option. Total interest expense for the program is about $1.3 million a year over 16 years.
“Critics will unfairly claim that the any borrowing on the part of the county is bad,” said Astorino. “That’s simply not true. Without borrowing, there would be no capital projects. Without mortgages, few people could afford to own homes. The test is whether the money is borrowed responsibly. Our record of paying down debt, maintaining our rainy day fund and using the pension amortization program judiciously demonstrates that the county’s finances are being managed carefully and smartly in the best interest of our residents.”
Key financial challenges going forward remain the burdens placed on the county budget by unfunded mandates from Washington and Albany, which cost Westchester taxpayers about $915 million. At $210 million, Medicaid remains the largest mandate for the county; New York is among a few states that pushes large-scale Medicaid costs to counties.
“Mandates from Washington and Albany deliver a crushing blow to taxpayers every year in that they consume nearly 75 cents of every dollar spent,” Astorino said. “Mandates must be addressed if taxpayers are ever to realize significant tax relief. With those challenges, we will continue to manage our dollars wisely, be disciplined in our spending, and make the tough choices that are needed.”
In addition to holding the line on property taxes and spending, the Astorino Administration has been promoting economic development through its Office of Economic Development and Industrial Development Agency. Specifically, it looks at new ways to unleash the potential of county assets so that they will generate revenues for the county. Key examples include public-private partnerships at Playland Amusement Park and the Westchester County Airport, as well as the initiative to develop the North 60 property at Grasslands into a bio-science center. When finalized, those agreements would generate hundreds of millions of dollars for the county to be utilized to help pay for essential services, infrastructure and tax relief.