SCHENECTADY — Still reeling from the pandemic’s economic fallout, Schenectady County proposes to cut spending nearly $9 million in 2021.
Despite the spending cut, and despite drawing on nearly $5 million in reserve funds, the proposed 2021 budget would increase the tax levy by 1.95 percent, boosting tax rates for Schenectady County property owners for the first time since 2016.
The plan issued Thursday by County Manager Rory Fluman would spend $327.5 million in 2021, down 2.6 percent from the $336.3 budgeted for 2020, and increase the property tax levy from $70.43 million to $71.8 million.
While the budget calls for no layoffs and no significant program reductions, it is also based on a very fluid set of numbers: The money rolling into county coffers could significantly increase or decrease — or both — depending on economic, political and public health factors far beyond county borders.
The expenses facing the county in 2021 could change just as rapidly, again for reasons beyond local control and not foreseeable in October 2020.
“We’re in the same boat as every other city and county, in that we just need to get our revenue back, and then we’ll be OK,” Fluman said Thursday.
He will formally present the budget to the County Legislature on Monday. After budget reviews Oct. 6, 7, 8, and a public hearing Oct. 13, the Legislature will vote on the plan Oct. 14.
The cost cuts in the operating budget fall in several areas but may not remain there.
Health insurance costs for county employees, for example, are down in 2020 because so many people put off routine medical appointments or elective procedures during the pandemic, so as to avoid medical facilities, Fluman explained. Is there now a backlog of medical care to be delivered? Will it be even more expensive to treat because the individual problems are worse because of the delay? Impossible to say.
The federal government delivered a temporary boost in Medicaid funding to counties in April; what happens when that expires?
How will hotels, retailers and the Schenectady casino fare in 2021, and what will happen to the taxes they generate for the county?
Will the federal or state governments come through with more assistance for counties?
These are all unknowns, though Fluman has assigned an estimate to some of these variables in his budget, such as a 33 percent drop in casino tax revenue and a 5.8 percent drop in sales tax revenue.
There are also some firmer numbers: The county’s pension obligations will jump 11 percent from $10.7 million in 2020 to $11.8 million in 2021 on order of the state Comptroller’s Office, due to the volatile stock market.
On the other side of the ledger, savings is coming from the county’s roughly 1,300-person workforce. No full-time employees will lose their jobs under the budget, but 30 vacant positions will go unfunded for a $2 million savings.
Also, 39 employees earning a combined $956,000 in annual salary and benefits took an early retirement incentive this year. While some will need to be replaced, as their positions are essential, the expectation is that the new employees will be lower-seniority and therefore be lower-paid. The hope also is that they’ll be younger and therefore require less medical care.
Finally, the county has purchased two buildings it had been leasing for offices — 388 and 797 Broadway. The cost of purchase, more than $20 million combined, is significant but the county has bonded for the expense. The interest rate is low and the first payment isn’t due for six months.
The proposed budget would further deplete the county’s general fund balance, a rainy day fund. It increased from $49.7 million at the end of 2016 to $71 million at the end of 2019, but is projected to end 2020 at $60.9 million.
Fluman proposes to spend $4.9 million of that to make the 2021 budget work, and notes that it may need to be drawn down further for unexpected expenses.
However, there is still some response money left for the root of all this uncertainty, COVID-19. On an emergency basis this spring, the county Legislature allocated $1.5 million to fight the pandemic. Fluman said the county has spent $1.2 million so far.
Also Thursday, Fluman released his proposals for infrastructure projects in 2021 and beyond. That capital improvement spending plan is more constrained than the operating budget proposal, and much of what can be put off from 2021 has been, Fluman said. The projects that remain — mostly with five- and six-figure price tags — are things already in progress or things that need to be done, such as roof and boiler repairs.