Certified public accountants Domenick Consoloa and Nicholas DeSantis of White Plains — known in the trade as Dom ‘n Nick — after reviewing Hein’s proposed budget, presented September 29, briefed county legislators at a special meeting last week. The firm was paid $70,000 for its work.
While praising the overall product, the duo raised concerns, some of which were echoed by legislators.
Hein, a Democrat, came to a zero tax-increase levy for 2011 by appropriating $12 million from the projected 2010 fund balance of $26 million at the end of this year. A similar appropriation for the 2012 budget would leave the county well below the five percent minimum “nest egg” fund balance recommended by the state comptroller.
Susan Zimet of New Paltz, at one time briefly a candidate for county executive, said the zero-tax increase was “great for next year.” But, she asked, “what then?” She predicted further depletion of the fund balance in 2012. Republican legislators raised similar concerns.
Former finance chairman Alan Lomita of Rosendale decried the “doom and gloom” over a budget that requires no increase in taxes from residents. “We’re at zero and everybody’s panicking?” he said.
Spending for the $352-million 2011 budget is projected to increase by less than one percent, while sales-tax revenues, the biggest source of local revenues, are expected to increase by two percent. Hein reduced the county workforce by almost 160 positions in the two budgets he has submitted as county executive, for an annual savings of more than $3 million.
Those personnel savings come at a cost, however. One soon-to-be-laid-off highway worker, a 34-year employee, told legislators of the financial hardships he and his family would face next year. Hein plans to fire six people in 2011; others will depart from retirement or attrition. A union representative said a $200,000 infusion could save those jobs. ”These are real people, not some vacant [budget] line that nobody’s in,” union rep Todd Schmidt told legislators.
The remaining workforce expresses increasing anxiety as the administration, having picked most of the low-hanging fruit, gets down to the bone.
The first public hearing following the accountants’ presentation took less than ten minutes. No one spoke in favor of the budget. Others asked that jobs be restored.
Looming large over the 2011 budget is that contracts with the county’s five unions representing some 1400 workers will expire at the end of this year. No money has been earmarked for raises in the 2011 budget, though there is a $1.9-million contingency fund. With an $80-million payroll, a one percent raise would represent roughly one percent of an increase in the property tax.
Setting an example, Hein has frozen the relatively generous salaries of non-union workers, including administrative staff, for the second year in a row.
Sales-tax collections, a barometer of county economic status, were running at more than seven percent above budget projections through September, according to the budget office, but inexplicably dropped almost two points in October. County tax receipts take about three months to catch up with sales. “There’s no rhyme or reason to these things,” said Budget and Finance Committee chairman Richard Gerentine of Marlboro. Legislators expressed hope that sales-tax receipts from the busy holiday season would produce robust results.
Property values showed a $2.3-billion increase in 2009 (based on 2008 values) but are projected to increase by only $89.5 million next year. Assessments increased by $4.1 billion in the pre-recession 2006 budget year.
The consultants said the increase for 2011 property values could have allowed lawmakers to increase spending by $490,000 next year without increasing taxes.
The last public hearing on the budget was scheduled for 7 p.m. last Friday night at the Saugerties senior center. Legislators will vote on the budget December 6 and send it to the executive. Deadline for a final budget is December 20.
Legislators, some of whom, like Hein, will be up for reelection next year, do not seem to have much wiggle room. Hein has drawn a line in the sand in vowing he will veto any increase in the property-tax levy.
The state, if we are to take governor-elect Andrew Cuomo at his word, will be cutting back on Medicaid and education. If state aid to education gets reduced, local property taxes may increase, and that will have an impact on what’s left for county coffers. Typically, county taxes represent about 16 percent of a property owner’s overall tax levy, which includes school and other local taxes.
For anybody looking over the horizon, 2012 looms ominous.
There are some, like Zimet, who think this house of cards will collapse come October 1, 2011. Obviously, they don’t read calendars. Hein will be up for reelection next year and there is no way he submits a high-tax, surplus-draining budget five weeks before he faces voters. Given his druthers, Hein said he’d use surplus before raising taxes, but first he has to generate surplus.
Along those lines, there is speculation — perhaps wishful thinking on the part of some legislators — which posits that Hein may not be around when the devil gets his due on or about Oct. 1, 2012 (submission date for the 2013 budget). “He’ll probably be in Albany or Washington,” Zimet predicted.
Hein, when reached the next day, would not comment. Revealingly, he didn’t burst out laughing, either.
If Ben Franklin had it right about death and taxes, the fate of the Ulster County Infirmary on Golden Hill in Kingston should soon be sealed. Because if anything is about death and taxes, it’s the infirmary. Despite the best of care, few patients leave alive and its future is all about who’s going to pay the bills.
From the gimlet-eyed financial side, the best thing that could happen to Golden Hill would be for it to all of a sudden go private. Immediately, $4.2 million in annual subsidies (budgeted for next year) would be wiped out, in addition to some 300 employees. Also off the books would be some $30 million a year in federal and state aid for the facility. Sale of the county’s operating license could net millions.
County officials say they have open minds about the future of Golden Hill. Handwriting on the wall suggests otherwise.
A month ago, the League of Women Voters issued a report calling on the county to sell the 280-bed facility to a non-profit operator. This was a key distinction. Ferncliffe Nursing home in Rhinebeck, which offers care comparable to Golden Hill, is operated by the Catholic Church.
Some people find non-profit Ferncliffe even better than Golden Hill. “The difference between us and them (Golden Hill) is that we plow our profits back into our operation,” a Ferncliffe source told me.
Structurally speaking, Golden Hill is in decline, the product of benign neglect by generations of county legislators.
That the county even put out a Request for Proposals (RFP) indicates which way this process is going. The RFP to take over Golden Hill drew seven responses, three of them locals. That level of interest suggests people with money to invest believe there is money to be made in senior citizen care.
When will it all happened? In terms of decisions, sooner, than later, I think.
A special legislative committee, after missing two of its own deadlines, will report to the full legislature at the end of the month. Negotiations with the state health department over closure issues could begin early in the new year.
Lost in all this numbers crunching is the compassion for the elderly infirm that used to be part of the Golden Hill conversation. It may be true that adequate to good care is available at other senior-care facilities, but for convenience there’s nothing like a nursing home at the county seat.
Also working against the county keeping Golden Hill is the political equation. For a long time, county government has been considered “a Kingston operation” by some outlander legislators, Kingston-centric, as it were. Evidence of that alleged bias is demonstrated by recent studies of Golden Hill which reveal that upwards of 80 percent of patients hail from a ten-mile radius of the county seat. For legislators beyond that cozy circle, future county subsidies of maybe $10 million a year for operating Golden Hill for other people’s constituents don’t make political sense. What does appeal to them are regional facilities of perhaps 100 beds, a concept that could be integral to ongoing discussions about senior health care in Ulster County. ++
Hugh Reynolds’ column appears weekly