In a departure from previous Fulton County supervisors’ meetings, the tone at Thursday’s budget review session shifted from grim to optimistic.
As the county’s budget review committee approved additional adjustments Thursday to next year’s recommended budget, the supervisors saw a glimmer of hope that they could keep the county’s tax levy increase within the state-mandated 2 percent property tax cap.
Counties have been under the gun trying to balance budgets for next year and also stay within the tax cap. But because of allowable exclusions, Fulton County can actually still meet tax cap requirements with a tax hike of up to 3.76 percent, said Budget Director Alice Kuntzsch.
The formula is a tricky one — based on current pension costs, average retirement rates and individual town assessments, among other things. Before the committee approved adjustments to next year’s budget figures Thursday, the county was looking at a 40 percent tax levy increase. The main change: Including an anticipated $3.5 million windfall from the sale of the county-owned nursing home, a transaction that has been stalled awaiting state approval.
Kuntzsch said she will calculate how much that number has changed before next week’s budget review meeting. A 2012 recommended budget will be presented to the full Board of Supervisors on Nov. 14, so there is time for members to knock that percentage increase down, she said.
“I believe the things we did last year were extremely difficult,” said committee member John Callery. “It was what we called the survival budget approach. And we need to review those approaches again.”
The committee on Thursday approved a recommended list of changes to the 2012 budget, which supervisors said is burdened by necessary expenses toward health benefits and retirement.
Historically, the budget committee projects a hefty property tax increase as the next year’s budget is still being finalized, and then makes recommendations throughout the review process to draw it back down.
Supervisors last year estimated a 36 percent property tax increase with its $96 million budget for 2011, but the actual increase ended up being only 10 percent.
But even 10 percent won’t be good enough this year, say supervisors who feel the weight of the state’s impending 2 percent property tax cap.
Members also went line by line through the Residential Health Care Facility’s budget Thursday, searching desperately for fluff to cut, as it represents a large portion of the county’s budget.
A topic of debate was whether to fund the facility through a three-, six- or nine-month period, or not at all. The committee decided to fund the RHCF for three months, and apply approximately $300,000 of the facility’s fund balance to offset the more than $4 million cost of running it. But members also booked the revenue from the planned sale of the RHCF — $3.52 million for the county’s general fund.
The Gloversville facility is in the process of privatization, and the county won’t see any revenue for its general fund until the sale goes through. Likewise, it must cover the facility’s operating losses until the sale goes through. The state Department of Health is just now reviewing the proposed sale, but county officials are optimistic the sale will be made final by March.
“The signs are pretty good that the sale is going to go through,” said Board of Supervisors Chairman David Howard. “We’re just waiting on the Health Department, who knows the vendor, the buyer, and they have a good track record. I don’t see anything that would impede the sale.”
County officials have faced the music and will apply a portion of the county’s dwindling general fund to help prevent a large property tax increase. The amount of fund balance to be used won’t be known until the budget process is complete, though.
Callery said that it’s easy to fall back on a county’s fund balance to contain that increase when the balance is upwards of $15 million.
“If you had a $15 or $20 million fund balance like we historically have in the past, you can make some big decisions and know that if a budget prediction is not accurate then you have your fund balance to cover it,” Callery said. “Unfortunately, it’s depleted in the last year or so. So we don’t have that option.”
Fulton County’s balance is in the $6 million to $7 million range at this point, after recent years of increased spending and revenue shortfalls.
The process for next year’s budget is unlike anything county officials have ever been through, Callery said. Layoffs are not just likely, but inevitable.
Committee members agreed Thursday that 2012 will be a transitional year in terms of county funding, and they are hopeful that once the budget is approved next year’s outlook will be less bleak.
“They’ve got to be cautious,” said Kuntzsch. “Because they’re taking some risks in other areas by budgeting only three months and booking the [RHCF] sale. But there were a couple of them saying, ‘Well, jeez, maybe we’re not that far away.’ ”
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Categories: Schenectady County