tomorrow’s new york counties the path forward. nysac | 540 broadway, fifth floor | albany, new...

Tomorrow’s New York Counties

The Path Forward

NYSAC | 540 Broadway, Fifth Floor | Albany, New York

The Path Forward Tomorrow’s New York Counties

• The Path Traveled So Far

• State Imposed Costs• Property Tax Freeze• Your County Budget


County Fiscal Issues

The County Fiscal Gap - 2011 (WHERE WE WERE IN SEPTEMBER 2011)

• Assumes slow economic growth with property tax receipts capped at levy limit + economic growth factor of .25%

• Other revenue sources projected at historic trends (2000-2009).• All expenditures predicted at historic growth rate (2000-2009).

*OSC Data – Compilation and Trending by NYSAC. Values represent aggregates for all non-NYC Counties

2009

2011

2013

2015

2017

2019

$24,000,000,000

$26,000,000,000

$28,000,000,000

$30,000,000,000

$32,000,000,000

$34,000,000,000

$36,000,000,000

$38,000,000,000

$40,000,000,000

Revenues

Expenditure

Annual Fiscal Gap = $6B

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County Fiscal Condition

• Since September 2011 actions by county government to reduce costs, combined with State Budget actions to lower the growth in some state mandates has improved the long term budget projections for counties

• In 2011, counties projected that by 2020, without any change in existing trends, the aggregate fiscal gap facing counties would rise to $6 billion annually.

• Today, this same analysis shows that the aggregate fiscal gap is expected to drop to about $2.9 billion annually by 2020.

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• Assumes slow economic growth with property tax receipts capped at levy limit + economic growth factor of .45%

• Other revenue sources projected at historic trends (2001-2012). Includes Casino Gaming Revenue • All expenditures predicted at historic growth rate (2001-2012). Includes Medicaid hard cap, pension

reform

*OSC Data – Compilation and Trending by NYSAC. Values represent aggregates for all non-NYC Counties

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

$24,000,000,000$25,000,000,000$26,000,000,000$27,000,000,000$28,000,000,000$29,000,000,000$30,000,000,000$31,000,000,000$32,000,000,000$33,000,000,000$34,000,000,000

Revenues

Expenditure

Annual Fiscal Gap = $2.9B

Because of State/County Actions the

“Gap” Narrows

The County Fiscal Gap – 2013

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Caveats: County Fiscal Condition

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While the out-year fiscal gap has likely been narrowed, counties’ current fiscal condition, in general, has deteriorated:

The revenue impact of the “Great Recession” is not over, it is likely to suppress economic growth and

local tax receipts for up to a decade (2008 – 2018)

State mandated programs and other fixed government costs continue to rise faster than

available revenuesState mandated programs and other

fixed government costs continue to rise faster than available revenues

The lower level of reserves leaves counties less capable

of absorbing any further economic shocks

Workforce reductions, program and funding cuts and selling public assets eventually reach

a point of diminishing returns and can no longer be used as way to balance county

budgets


State/County Actions Impact on the Fiscal Gap

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Cut out year fiscal gap in half

(from $6B to $2.9B)

However, projected fiscal gap of $2.9 billion for counties

in 2020 is 10 percent of projected

revenues for that year – this means a county would have to cut their budget by 10% in 2020 to

reach balance

Controlling costs and revenues is an

ongoing challenge for counties because the

State plays a significant role in

county government For a typical county, 70-80 percent of all spending is for state

and federal programs, and fixed costs


Reimbursement to Counties for State Programs

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The State Comptroller reported that from 2001-2011:

Total federal and state aid to municipalities failed to keep pace with inflation

Between 2001 and 2011, state reimbursements to counties dropped from 15.7 percent to 11.6 percent of total county costs, and only due to the influx of federal stimulus funds has the share of federal aid been maintained

With stimulus phased out at the end of 2011 and no new federal funds to fill the gaps, federal aid levels will fall to pre-stimulus levels, or belowNYSAC has identified that between 2008 and 2012 State reimbursement to Counties dropped by $350 million annually with no commensurate reduction in state mandated costs during that time period. This is significant.


The Cost of State Programs on the Property Tax Levy

State imposed costs remain a dilemma for county government. Medicaid alone equals nearly half of a typical counties’ property tax levy.

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Property Tax Freeze How it Works and What it Means for Your County

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The State Budget includes a temporary (2014-2016) state financed property tax freeze

State rebate checks sent to STAR

eligible properti

es

Calculated by the State on a house by house basis

School district

levy rebates are paid in 2014

and 2015

All other municipal levy rebates are paid in 2015 and 2016

Staying within the tax cap does not guarantee a

rebate due to exemptions related to

reassessments, changes in

STAR eligibility, the

$ value of home

improvements, etc.

The State estimates cumulative rebates over the next 3 years of $1.5 billion



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YEAR ONEMunicipality must stay

within tax capRebates are paid even if the levy stays the same or goes down. In these circumstances the rebate equals the allowable

tax cap growth for that house for each taxing jurisdiction holding the levy flat or cutting

Conditions Necessaryfor a Rebate to be Paid


Property Tax Freeze How it Works and What it Means for Your County Conditions Necessary

for a Rebate to be PaidYEAR TWO

Stay within the tax cap and submit a government efficiency or shared services plan that demonstrates savings equal to 1 percent of the combined property tax levies for those participating

in the joint planMunicipalities can submit their own efficiency plans

Efficiency plans are due June 1, 2015 to State DOB for evaluation



• Budget Director and Governor’s Office have indicated they want forward looking initiatives presented rather than things already accomplished – they believe a reasonable look back is 1 or 2 years tops.

• The 1 percent in savings must be recurring, in fiscal years 2017, 2018 and 2019

• No requirement to reduce the tax levy in these years by 1 percent

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The law anticipates counties will take the lead in presenting and implementing shared services or government efficiency plans across municipalities

Requires the State Budget Director to consider existing shared services or government efficiency plans already in place when evaluating these plans



o There is nothing in the law that would jeopardize future state reimbursements back to the county/municipality

o There is nothing in the law that would require tax payers to return rebates they received in 2016 because the shared services government efficiency savings target were not achieved

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What does One Percent look like?

ONE PERCENT

What happens if the savings

projected from the efficiency plan do not materialize?

These savings have to

accrue in 2017/18/1

9.

If all localities join with the county for a

shared services

project, 1 percent of combined

2014 levies must be saved


County Shared Services Improving Government Efficiency

Pursuing the most efficient government operations is part of the solution for lowering the property tax burden and closing the projected out-year budget gap.

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Closing fiscal gaps and improving the efficiency of county government is an ongoing process.

Rethinking how services are provided and sharing resources with other counties, and/or other local government partners, has become standard operating procedure for county leaders.



Onondaga and Oneida County are sharing Medical Examiner Services.

Ulster County repurposed an elementary school as an extension of their community college and offices for all of their health and human services.

Genesee and Orleans counties’ are sharing public health services. This initiative is the first of its kind in New York State.

Essex County consolidated its offices of Community Development and Planning, Youth Bureau, Stop DWI and Traffic Safety into the Office of Community Resources.

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Genesee County buys and maintains street signs for all the municipalities within the county except the City of Batavia.

Chemung County is consolidating all the highway departments (except for Elmira).

Dutchess County shares school resource officers, and they provide a conflict defender program jointly with neighboring Ulster

county.


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Westchester provides Employee Assistance Programs (EAP’s) to 33 municipalities and neighboring Putnam.

Nassau County buys gasoline, diesel, heating oil, motor oil, antifreeze, industrial, medical and propane for its townships, villages, schools, libraries, sanitary districts, community college, water districts and fire academy.

Rensselaer County dispatches all fire departments, ambulance squads and police departments for all its municipalities with the

exception of the Town of East Greenbush.


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Counties understand the fiscal challenges state leaders are facing – we have to do more with less, and we are.

Finally, we must work together to close budget gaps, share services, reduce the cost of programs and services at the local level, and work toward a fundamental realignment of how we fund government services in New York.

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tomorrow’s new york counties the path forward. nysac | 540 broadway, fifth floor | albany, new...

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