The county is in a precarious financial situation because of state aid cuts and continuing multimillion-dollar losses at the county infirmary, a new analysis warns.
The analysis by County Administrator Spencer Hellwig finds that the county may need to draw $9 million from its fund balance this year simply to cover losses. That would potentially shrink the surplus to less than $10 million.
Key factors cited by Hellwig are an anticipated state aid cut of $1.7 million, plus the expectation that the Maplewood Manor infirmary will continue big annual operating losses.
Board of Supervisors Chairman Tom Wood, R-Saratoga, said the new analysis of the county’s $294 million budget raises issues that will need to be addressed quickly to prevent deterioration of county finances.
“I don’t mean to be alarmist, but I’m expressing a level of concern,” Wood said after releasing the report at a meeting Wednesday in Ballston Spa.
Wood said “everything is on the table” – including a hiring freeze and selling the nursing home to a private company, as Montgomery and Fulton counties have done. But he said raising property taxes next year, while it needs to be discussed, will be “an absolute last resort.”
County officials pride themselves on their fiscal conservatism. Since the 1980s, Saratoga County has had the lowest property taxes in the state, and for most of that time the county had a healthy “rainy day fund” and a strong financial rating. But in the last two years, the fund balance has been drawn down from $30 million to $16.6 million because of the infirmary’s losses and earlier state aid cuts.
Hellwig is projecting that based on current trends, the county will need to draw the fund balance down to around $8 million this year. The state Comptroller’s Office suggests municipalities have fund balances equal to 5 percent to 10 percent of their budget— or $14 million to $29 million in Saratoga County’s case.
The anticipated revenue shortfall at Maplewood Manor could be $8.5 million, the largest loss yet for the infirmary, which has operated in the red for the last eight years. The county blames Medicaid rates that haven’t been adjusted in years and don’t reflect the actual cost of providing elder care.
“The single largest factor driving these annual shortfalls is the Medicaid reimbursement that the facility receives under this state-funded program,” Hellwig wrote.
It also appears the county’s sales tax revenue won’t grow by the 8 percent county officials had anticipated, creating another financial strain.
Waterford Supervisor John E. Lawler, who asked for the analysis last month, praised its preparation. “I think the exercise is good to just to make us aware how big the hole is,” he said Wednesday.
Wood said he’ll name a special committee, perhaps as soon as next week, to review the county’s financial situation.
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