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County borrows to cover costs

By Dan Hust
MONTICELLO — October 19, 2010 — With preparation of the county’s 2011 budget in full swing, legislators on Thursday listened to and debated a variety of money issues.
Treasurer Ira Cohen matter-of-factly informed the Executive Committee that nearly $15 million in bond anticipation notes (BANs) were sold on the bond market the day before at .68 percent interest.
He added that the county “can no longer resist” issuing tax anticipation notes (TANs) as well. The TANs total $5 million, with interest pegged at .51 percent. Those funds are secured by the anticipation of the taxes the county will collect next year, but they’re going to pay the bills in 2010.
“This money is meant to carry us through the end of this year,” Cohen explained.
Yet a tax hike still seems inevitable, and County Manager David Fanslau turned the blame on the state.
“The state must fully fund their mandates from state funds, not county property taxes,” he insisted.
Currently, the county has no ability to ignore state-mandated programs without facing severe penalties, he explained to legislators.
With just 26 percent of the county’s near-$200 million 2010 budget under the discretion of county officials, Fanslau said the state is suffocating Sullivan and every other county.
“Counties can no longer use local property tax dollars for local needs, such as road and bridge maintenance and public safety, because the funds are consumed by state mandates,” he lamented.
“If the state wants true property tax relief, they must let local officials set the property tax levy for local priorities, rather than paying for state-dictated programs.”
Instead, Albany is seriously considering imposing a tax cap, limiting how much of a tax increase counties, townships, villages and school districts can levy per year – possibly no more than 1-4 percent.
While two-thirds of the County Legislature could override such a cap, New York City would be exempt at the get-go.
The kicker: “The tax cap comes with no moratorium on unfunded state mandates,” said Fanslau. “... Ironically, it preserves the status quo – that New Yorkers pay the highest property taxes in the nation.”
The large amounts of acreage in the county that are off the tax rolls and the drop in assessments and incomes due to the recession further complicate the matter, he added.
So do those who haven’t paid their taxes, said Legislature Chairman Jonathan Rouis, which amounts to $26 million.
If every cent in back taxes and exempted properties were paid, Fanslau added, the county wouldn’t have had to lay anyone off in 2010, and property taxes might have been reduced across the board.
But county officials weren’t spared criticism of their approach to budget season either.
“It’s the Policemen’s Benevolent Association’s [PBA’s] understanding that you are insisting on layoffs in our department,” said Sullivan County Sheriff’s PBA President Kyle Muthig, speaking directly to Legislator Kathy LaBuda.
Muthig and half a dozen other PBA members were in the meeting room, along with Undersheriff Eric Chaboty and Sheriff Mike Schiff.
Muthig pointed out that Schiff has already cut $700,000 of the $1.5 million Fanslau asked him to slice out of the Sheriff’s Office’s budget.
LaBuda replied that no specific layoffs had been discussed but that the Division of Public Works had suffered enough layoffs in the past few years.
She asked Muthig to understand her position, where everyone is begging her not to cut whatever department they work in, have friends in, or place great value upon.
“If you were in my seat, who who would you cut?” she asked Muthig. “... I think everybody should share the pain.”
Muthig disagreed, noting that LaBuda’s son is a police officer who would understand the essentiality of certain staffing levels in law enforcement.
Legislators attempted to explain how a rumor got started that 15 deputies in the road patrol will be laid off – which Fanslau and others have said is not true.
In fact, Fanslau promised at that meeting that he will not advocate for nor recommend cutting 15 deputies.
“That is not something that would be prudent,” he agreed.
LaBuda invited PBA members to upcoming budget worksessions, but Schiff vigorously insisted he remain the conduit for budget discussions involving his department.
“I don’t want anyone going home with a pink slip,” he remarked, aiming his comments at LaBuda. “... I don’t need to ‘be fair’ with the DPW. I’m not a legislator, and I don’t need my people coming to legislative meetings! That’s my job.
“... At the end of the day, we will make cuts that are necessary and responsible,” he said.
LaBuda responded that she must look beyond just the Sheriff’s Office, but the sheriff replied that public safety is more important to county residents than the relatively small tax increase required to keep his office fully functional.
Rouis implored everyone to drop the heated rhetoric, which he felt is “unnecessarily firing up the public.”
But it continued, with Muthig pointing out patrol deputies haven’t had a raise in three years.
“Neither have we, so we feel your pain,” LaBuda quickly replied.
In the meantime, Legislator Ron Hiatt invited anyone and everyone to attend upcoming legislative budget meetings (dates and times are regularly published in the Democrat’s meetings box on page 2A and through legal notices in the Classifieds section).
“An informed electorate is an empowered electorate,” he said. “You are all welcome.”

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