State of county finances reviewed

Legislators received an update on the county’s finances at our August meeting. As we move into the upcoming budget season for 2014 the situation looks grim.

Despite sales tax revenue exceeding budget projections by $1.4 million for a total of sales tax revenue of $134.5 million, Dutchess County ended last year $6.3 million in the hole. Loss of state and federal aid is partly to blame. The county received 13.5 million less in State Aid in 2013 from 2011 (but $1 million more than we received from the state in 2010), and $1.8 million less in federal aid than the previous year.

However, the greater issue appears to be spending. Losses resulted from more county resources being spent than was brought in on mass transportation (2012 loss of $1.7 million) as well as the Dutchess County Airport (2012 loss of $185,704).

However, the bulk of county resources were spent in seven cost areas. The county spent $45.2 million for employee pension and health insurance, $43.3 million on Medicaid, and $20 million on preschool education and early intervention programs. These are state-mandated programs that afford us little wiggle room for budget cuts.

In 2012, the county spent $40.7 million on the sheriff and jail costs including $8 million for housing out inmates. We also spent $16.8 million on debt service for capital projects (more if the community college and airport are factored in). We also spent $12.3 million on public work projects. Lastly, $14.9 million of county funds were expended on Dutchess Community College. Absent new revenues the county will need to look to these final four areas to restore our budget to a state of balance.

During last year’s budget process county government took several steps to control spending and provide for new revenue with mixed results.

We capped the sales tax revenues going to local municipalities, thereby retaining more of the revenue for county use. The Department of Mental Hygiene, which had appeared on last year’s high cost area list, had its budget ravished almost to a point that the department is now unrecognizable. We also voted last year to adopt a mortgage transfer tax in an effort to bring in $4.5 million in 2013 revenue. Unfortunately, none of our state legislators sponsored the legislation in Albany. Coupled with the plan to construct temporary jail pods to house inmates locally rather than send them to other counties (which also has stalled pending state department of corrections approval), the 2013 budget is significantly out-of-balance as we approach the 2014 budget cycle.

Current projections are that we will face a $4.8 million shortfall in the mortgage tax, a $3.4 million shortfall in sales tax and a $3.2 million shortfall in the jail’s budget. On the positive side we anticipate a $2.2 million surplus in pension costs and a $1.2 million surplus in the area of social services.

As the Dutchess County executive and the budget department goes to work to develop the 2014 budget for presentation to the Dutchess County Legislature in November, we can be assured that more hard choices, cuts and layoffs are ahead.

Michael N. Kelsey represents the people of Amenia, Washington, Stanford, Pleasant Valley and Millbrook in the Dutchess County Legislature. Write him at KelseyESQ@yahoo.com.