County Budget Director Comes to Mamaroneck to Explain Zero Increase for 2005

by Judy Silberstein

(November 7, 2004) Westchester County is predicting a 1.47 billion budget with a zero percent increase for 2005. OK, an election is coming up in

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November 2005 for County Executive Andy Spano – who ran on a platform of lowering taxes but was forced to raise taxes 14.9% in 2003 and almost 18.8% in 2004. OK, other jurisdictions, such as the Town of Mamaroneck will increase taxes for 2005, although not as high as last year. So how can the county get to zero? Westchester County’s budget director, Kate Carrano appeared at the League of Women Voters Breakfast Forum at the Nautilus Diner on December 3 to explain to local residents how it was possible to reach zero and still stick to the conservative approach to budgeting that has earned the county good points with the bond rating agencies for many years.

Budget Director Kate Carrano (in red) discusses the zero increase with: LWV Forum facilitator Alice Bloom; Mamaroneck Library Board Trustee Carolyn Pomeranz, Town of Mamaroneck Councilwoman Judy Myers, County Legislator George Latimer and Village of Larchmont Trustee Anne McAndrews.

Some aspects of the county budget have remained very stable over the 25 years that Kate Carrano has been involved with the budget, first as a public administration intern and, since 1998, as budget director. She has worked with three county executives and 14 different legislative boards. Over most of that time, she reported, the percentage of the budget coming from the property tax has remained stable – approximately 33%.

In 1991 the county government asked for and received a 1% boost to the sales tax, but unlike other counties – notably Suffolk and Nassau – Westchester shares that extra funding with the schools and local municipalities. Last year, the state allowed the county an additional one-half percent sales tax, (although they request a full percent) which again is shared with the schools and local governments.

What’s new this year?

Ms. Carrano mentioned that there has been some good news on the revenue side: the extra sales tax has brought in new money as has the auto license and mortgage filing fees the state gave the county (which it did not request). The county would have preferred the entire one percent boost to the sales tax, which is a more stable, predictable revenue stream. However, in the current economy, the county is benefiting from the additional fees and expects to see an extra $15.9 million from these categories. The county is also expecting major new revenue: from the Medical Center as its financial condition improves (around $10 million); from a new hike in the amount the state pays for legal aid ($2.4 million) and from the 2003 fund balance ($10.7 million).

Local jurisdictions receive a portion of the sales tax collected by Westchester County. Local revenues from the sales tax are up for 2004, based on estimates from the past eleven months. (Courtesy of Westchester County Budget Office.)

On the expense side, the county has been able to negotiate a number of favorable agreements with their unions to cut expenses for overtime pay and some benefits, and they are continuing to benefit from automating many administrative chores that allow for cuts in staff – an additional 37 positions are being phased out. The women’s jail has been closed and 20 vehicles eliminated from the county fleet. These four measures alone account for around $11 million in savings.

The zero increase budget comes with very few cuts in programs. Of interest to local riders, there are no cuts proposed for local buses, including the commuter buses that shuttle residents to the train station. Earlier this year, the buses appeared to be on the chopping block. They were rescued at the last minute when the state authorized the half-percent sales tax ( Larchmont Bus Routes Safe - for Now)

Challenges to reaching zero

The challenges to reaching a zero increase budget come largely from the growing expenses for state mandated programs, most notably Medicaid (up $17.5 million for a total of $238 million in 2005) and Services for Children with Disabilities (up $3.5 million for a total of $52.5 million). If it were not for growth in these two programs, said Ms. Carrano, Westchester’s budget would be the same today as it was in 1998. Other pressures come from increases in employee health benefits, insurance and transportation costs. Transportation is another sore point for Westchester; other suburban counties get much greater subsidies from the state in this category.

The county does not have control over the mandated programs or over the amount or timing of state aid for next year. To finish off Westchester’s budget, Ms. Carrano has to estimate the aid lines each year. Despite pressure to put in a relatively generous estimate, she tends to hold the line and not budget for increases unless they are actually in hand. Even then, after a budget is passed, she requires each department to hold back a percentage of its budget in case promised aid does not arrive or in case of spikes in demands for services or other unforeseen emergencies.

Is zero low enough?

Larchmont Trustee Anne McAndrews, a regular at the breakfast forum, noted that even with no increase this year, the county tax burden was plateauing at a very high level because of the very large increases in the past two budget years. Town of Mamaroneck Councilman Ernie Odierna, another forum regular, proposed that further budget reductions might be accomplished by “thinking outside of the box.” One possibility might be sharing one position among local and county government, he suggested.

Ms. Carrano noted that it was hard to wring too much more out of the budget. “Everyone talks about bloated bureaucracy,” she said, “But we have become much more streamlined than we were.” She indicated that because mandated programs now represent such a large portion of the budget, it’s hard to make further cuts without eliminating the “quality of life programs” that residents value.

Is Westchester getting short-changed?

As Ms. Carrano explained the budget to the forum attendees, Westchester County Legislator George Latimer provided additional commentary. He argued that Westchester County continues to be at a disadvantage compared to suburban counties on Long Island. Nassau and Suffolk have been granted higher sales tax increases, are not required to share the added revenue, and get much higher transportation aid. The boost in their sales tax completely covers their Medicaid costs, he pointed out.

Westchester also shares revenue with local governments from the mortgage tax, which increased substantially as homeowners refinanced their homes. With interest rates rising, refinancing has slowed, and this source of revenue is predicted to shrink.

Since Mr. Latimer has just been elected to represent the 91st District in the NY State Assembly, a number of forum participants expressed hope that he might be able to effect some changes that would help out Westchester when he reaches Albany. “Don’t expect too much from a freshman,” he reminded the group. Nevertheless he waved a copy of his latest reading material, a memo on potential reforms from a more experienced colleague.

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