2009 Tentative Budget Speech

Posted October 1, 2008

I would like to thank everyone for coming to the release of Ulster County’s 2009 Tentative Budget Press Conference. Because of the transition to the “new” Charter form of government, this will be the last budget originating from the Administrator’s office.  I’d like to take a brief moment and thank the entire Legislature, (both sides of the aisle), for being so open to reform over the last two years and I hope that even during these tumultuous times, everyone will work together to deliver the best possible budget for the people of Ulster County.

  • Review important dates in the budget process.

If there’s one thing that Budget personnel dislike, it’s high levels of volatility.  With high levels of volatility, making projections becomes much more difficult.  Unfortunately the current situation in New York State is more volatile than ever. It’s important before we proceed that we review the serious areas of uncertainty facing Ulster County in 2009.

  •       What will the State Legislature do if it reconvenes in Nov 08’?
    • Potential Cost shifts
  •       What will fuel and energy prices do during 2009?
  •       Will commodities prices for steel used for bridges or asphalt for highways continue to remain highly volatile?
  •       What will the national economy do in 2009?
  •       Will litigation on the UCLEC be concluded in 2009?

  With all these potential issues plus many more, this budget was clearly one of the hardest in the County’s history.  Collectively, we watch the troubles on Wall Street intently because there are cascading effects on Federal and State governments and ultimately local budgets are impacted. One of our greatest concerns surrounds the concept of “cost shifting”.  This can occur when one level of government (typically the State or Federal government) reduces funding for a mandated program but doesn’t reduce the mandate. The net effect of this is a shift in burden to the local taxpayer.  And since the New York State Association of Counties estimates that between 65%-70% of all County budgets are mandated, we are watching this issue closely. In 2008 Ulster County and some of its agencies absorbed a 2% mid-year “cost shift” but we are concerned about more.  One thing is clear; the costs for State and Federal mandates are rising while the corresponding revenue percentages from the State and Federal governments are falling.  This has occurred in areas like DSS, Golden Hill Healthcare Facility and the Youth Bureau. Over the last two budgets we have fought to deliver reform and innovation;   consolidating departments and creating a County Department of the Environment.  We did this while rebuilding a battered general fund balance that had almost dipped to zero. We’ve strengthened Ulster County’s finances in preparation for challenging times.  Right now there are serious concerns surrounding the global, national and statewide economies.  The people of Ulster County are facing the most serious economic uncertainty they’ve seen in over a generation. The estimated fund balance at the end of 2008 will be 23.2 million or 8.88% of General Fund adopted budget. This budget appropriates $1.4 million of the general fund balance to reduce the tax levy.  We are able to this because of the prudent planning that has occurred over the last two years.  We have done all of this while still maintaining an appropriate level of fund balance to protect the County’s bond rating overall fiscal stability.(Note: 8.4%) We fully appreciate the challenges facing everyone, and that’s why the tax increase included in the 2009 tentative budget has been held to 2.95%.  To put this number in perspective, it represents an impact to the average Ulster County taxpayer of less than $25 per year, ($22) and is almost half the rate of inflation. In Ulster County, it’s important to note we must add the additional costs from the Law Enforcement Center to the typical challenges facing New York Counties.  We’ve been paying roughly $5 million dollars annually just in debt service for the last two budgets.  This year, we must begin adding an additional $1.6 million in principal and interest payments to begin paying off contractor settlements.  The slide clearly shows the burden this project places on Ulster County’s debt service budget and will continue to do so for the next 21 years. With this and the wide spectrum of services the County provides, Ulster County taxes still make up only 16.5% of the total property taxes paid. To further put this in perspective, 64% of your property tax bill is school tax.  The impact of this becomes much clearer when you realize the 2.95% Ulster County increase is comparable to a School tax increase of less than ¾ of one %.

  • Major cost centers discussion.
  • Revenue discussion:

¼ of revenue from sales tax that’s why it’s so important to be prudent with this number The $85 million in sales tax doesn’t include the $14.4 million distributed to the Towns and the City of Kingston.   The Charter Transition Committee:   Now I’d like to discuss the impact included in this budget for the transition to the Charter form of Government.  We have completely deferred to the recommendations of the Bi-Partisan Charter Transition Committee headed by Legislator Gary Bishoff. The Charter Transition Committee recommended 3 additional positions within the Comptroller’s Office, 3 within the Executive Office and 2 within the Legislative Office.  In deference to the Charter Transition Committee these are included in this budget.  That’s the 8 positions you see. They also requested that the budget attempt to remain position neutral.  This budget does exactly that and more.  That’s the 15 funded positions that we removed.  There are no additional personnel costs not offset by vacant position reductions in this budget.  As an aside, there were requests by departments for 20 new positions (all very important).  But the truth is we simply can’t afford them.  So none of those new position requests were granted in this budget. ADDITIONAL COSTS:

  •       Budget Increases
    • Selected Expenditures compared to Revenues

(If you want to see all the details they are available in your summaries on page 26.) One of the ways this number can be controlled is by governments working more closely together.  That’s why we’re excited about a $260,000 Shared Municipal Services Grant Ulster County has received from the New York State Secretary of State. The RFP, or request for proposal, has already been awarded.  This is designed to identify key areas where the Towns, the City of Kingston and the County can work more closely to save everyone money.  Included in this review will be a full implementation plan to make sure this doesn’t end up as a study on some shelf.  We anticipate action in 2009. During these difficult times it’s essential we address old problems in new ways.  This year Ulster County is exploring new ways to buy energy.  We’re working with numerous municipalities around the state to pool our buying power and save money over current utility rates.

  • How we arrived at sales tax projection.

We are also continuing to expand our commitment to transparency.  Last year, for the first time in Ulster County’s history, the budget was available online.  This year, not only is the budget available online, we have continued to increase the level of detail included, making it easier for everyone to know exactly where the money is.  The tentative and then the final budget will be available at the County’s Website.  www.ulstercountyny.gov Without question the issues we are up against are daunting.  Whether it be the stock market, State deficits or a downturn in the national economy, the conditions we face are not just difficult they are also very fluid.  That being said, we have fought to stabilize Ulster County’s finances specifically for times like these. In spite of the intensely challenging times, this budget provides for the smooth transition to the Charter form of government and a solid foundation.  My staff and I look forward to working with the Legislature throughout the remainder of the budget process to ensure the best possible budget for the people of Ulster County.  Thank you.