The Republican members of the Westchester County Board of Legislators (BoL) are expressing serious concerns over the continued inaccurate and inflammatory statements from the Democrats on the BoL. A press release that was distributed by the Democrats on Thursday, July 19 was full of misrepresentations and unfounded accusations. The Republicans would like to correct the public record.
Minority Leader James Maisano (R-New Rochelle), a consistent advocate for more cooperation and compromise between the Democrats and County Executive Astorino, expressed frustration at the latest round of attacks from the Democrats. He stated, “Last week’s press release by the Democrats was wrong on the facts. No one wants to see this type of hyper-partisan, false information from government.” Maisano continued, “It is an outrage that legislators are spreading false information about Westchester County’s financial situation. It is time for the Democrats to quit attacking the County Executive, and his administration, and accept that under his fiscal leadership and with the cooperation from a bipartisan BoL, we have made real progress toward getting spending under control here in Westchester County. This is not a time to be playing partisan games with the County’s finances – when other large counties, such as Erie, Nassau and Rockland, are confronting serious financial crises. We must continue to do better than that in Westchester and place the priority on properly managing county tax dollars.”
Legislator John G. Testa (R-Peekskill/Cortlandt/Yorktown) served as a City Councilman and Mayor of Peekskill prior to his election to the BoL. In those positions, Legislator Testa has helped shape a dozen municipal and county budgets. Legislator Testa said, “In my years as Mayor and as a member of the Legislature, I have never witnessed such obstructive and partisan behavior from any group of lawmakers as I have seen from the Democrats during this budget year.” Testa added, “We delivered a balanced, bipartisan budget with a decrease in the tax levy, but the Democrats can’t seem to tolerate any level of cooperation. The Democrat’s habit of trying to twist the past budget numbers into some tortured version that supports their attacks on the County Executive are a colossal waste of time and a disservice to the people of Westchester County. The Democrat’s unwillingness or inability to comprehend the effect that their use of the County’s fund balance has had on our Moody’s rating outlook is stunning to me. The fact that they would choose to be politically partisan and exploitative of the difficult economic challenges we are trying to navigate is absolutely irresponsible.” Testa concluded, “We will begin to craft a new county budget in the next few months, and it will be another very difficult spending plan. I encourage my Democrat colleagues to take this opportunity to stop the incessant political attacks and attempts to subvert the efforts of the Budget Director. I urge my Democrat colleagues to join us in doing the hard work that we were sent here to do. Let’s start working together to create the best and most responsible spending plan that we can for next year.”
Setting the Record Straight
The Democrat’s assertion that the 2011 Adopted Budget was a “financially responsible document” is misleading. The lack of validity in such a statement is evidenced by the fact that the County used $8.5 million of General Fund balance in order to pay for its operations in 2011. This is the fifth consecutive year that the County has had to use General Fund balance in order to pay for its operations. Five years in a row constitutes a trend of structural, not cyclical, imbalance. The continual use of fund balance to correct structural imbalances is hardly “financially responsible.
In December 2011, the Democrats took many actions over the objections of both the Republican Legislators and the County Executive. Had the Democrats not erroneously deleted $10 million of appropriations for the unsettled labor contracts of the County’s Correction and Police Officers, the County would have finished 2011 with a structurally balanced budget for the first time since 2006.
In order to justify their $30 million spending spree through 2011 Budget Additions, the Democrats continued their practice of overestimating revenues, and placed unrealistic revenue projections in the 2011 Adopted Budget. Just a sampling of their baseless revenue projections include:
• Labs & Research revenues were $3.1 million less than BoL Democrat projections.
• Parks revenues were $4.6 million less than BoL Democrat projections.
• Sales Tax collections were $6.3 million less than BoL Democrat projections.
Just these three items total $14 million.. That’s $14 million of expenditures added to the Budget by the Democrats with no revenue to pay for them.
The Democrats are absolutely correct that the All Governmental Funds balance increased by $120 million. However, they fail to tell the whole story. The All Governmental Funds balance is not actual cash. In 2011, the County issued bonds in order to eliminate the $126 million deficit that was in the Capital Projects Fund at the end of 2010. That fund is simply now back to zero rather than having a $126 million deficit. The important number to focus on is the $8.5 million reduction in the General Fund balance. This is the account from which the County funds its annual operations. The unrestricted General Fund balance now stands at only 7.8% of county operations. This is far below the 12.7% average of other similarly sized triple A rated counties.
The Democrats continuous personal attacks on County Budget Director Lawrence Soule must come to an end. He is a first rate professional and the county is lucky to have him on our team. The BoL Democrats will stop at nothing, including the release of false information, to discredit Budget Director Soule. Contrary to BoL Democrat statements, the County Real Property Tax Levy printed in the Budget is accurate. While the 2011 Tax Warrants effectuated by Act 22 of 2011 were in the amount of $548,423,468, the County Real Property Tax Levy contained in the 2011 Adopted Budget was in fact $555,053,491 as adopted by Act 419 of 2010, and is accurately reflected as such in the County’s 2011 Adopted Budget and 2011 Comprehensive Annual Financial Report (2011 CAFR).
Budget Director Lawrence Soule’s comments to Moody’s Investor Service in 2011 were not the impetus for the rating agency to place the County on “negative outlook.” The County’s five consecutive structurally imbalanced budgets are to blame as evidenced by the excerpts from the Moody’s Investor Service reports below:
From the July 2011 Moody’s Report:
“The negative outlook reflects the county’s ongoing structural imbalance that has driven reserves declines which may limit the county’s financial flexibility and ability to respond to mid-year revenue or expenditure fluctuations. In the event of additional future draws on reserves, the county’s financial flexibility could become out of line with similarly rated counties that rely on economically sensitive revenues.”
From the July 2012 Moody’s Report
“The negative outlook reflects the county’s structural imbalance in prior years that has driven reserves declines which may limit the county’s financial flexibility and ability to respond to mid-year revenue or expenditure fluctuations. In the event of additional future draws on reserves, the county’s financial flexibility could become out of line with similarly rated counties that rely on economically sensitive revenues.”
Moody’s point is quite clear above – it had the exact same opinion when basing their rating on Mr. Soule’s projections for 2011, and when basing their rating on the audited figures in the 2011 CAFR. The County is currently in a strong financial position, but we all must be vigilant to ensure that the County’s financial position does not degrade further. If our finances are not prudently managed, Westchester County could be in the same position as Erie, Nassau or Rockland or Nassau, and the Republican legislators will not allow that to happen on our watch.