Bellone: 2 Bills Could Help $1.5B Budget Gap; Not All Onboard

SUFFOLK COUNTY, NY— Suffolk is in a state of "financial emergency" as it staggers under the weight of the "catastrophic" coronavirus crisis — and on Wednesday, County Executive Steve Bellone urged the Suffolk County Legislature to move forward with two bills that he said would be put to voter referendum and could help close a looming $1.5 billion budget hole.

Bellone recently signed an executive order to freeze salary and step increases for all non-union employees; he also submitted a resolution to the Suffolk County Legislature that would extend the action through 2021, a move that will save taxpayers nearly $3.4 million.

In recent days, Bellone has stated emphatically that the federal government needs to step up with aid as Suffolk County confronts "catastrophic, cataclysmic numbers — beyond anything we have ever seen or anticipated."

Last week, Bellone said Suffolk is facing a staggering $1.5 billion budget gap over the next 15 months, and the time for federal help is now.

Bellone said a meeting of the legislative budget committee was held and a report given by the non-partisan budget review office that "laid out, in stark detail, the emergency this county is facing from the impacts of COVID-19."

The report, he said, indicated that Suffolk County is facing an $800 million budget hole over the next three months, echoing what an earlier report from an independent COVID-19 fiscal panel, made up of municipal and independent financial experts, stated. That first report said that in a "best case scenario," the county would see an $829 million budget gap over the next three months.

The most recent news, Bellone added, only looked at what needed to be done for the budget due in September. Over the next 15 months, he said, the county is staring at a gaping $1.1 billion to $1.5 billion budget gap It's time, he said, for the federal government to act.

"Our immediate need is $1 billion in federal relief," he said.

While that amount won't solve all the problems and tough choices will need to be made, along with efforts to transform government and make it more "productive, effective and efficient," the funding "will prevent the worst impacts from COVID-19 from happening."

Those impacts, Bellone said, will be borne by taxpayers, essential employees and first responders, who will have to cover the cost of the pandemic response.

A list of mitigation measures were presented that could be implemented, including layoffs of 200 employees that would save $21 million, lag payrolls that would save $28 million, raising energy and sales taxes, and amortizing pensions, which could save $25 million.

And those mitigation measures — with all the hardships they would mean to taxpayers and first responders — would only add up to $150 million, Bellone said, when $829 million is needed.

Still, immediate action needs to be taken soon, Bellone said.

To that end, he said, the county's budget office has put aside and embargoed $29 million in funding from various departments; resolutions have also been forward to mitigate impacts totaling $77 million.

The two bills outlined

Tax stabilization funding streams would be used to help mitigate impacts, as well, Bellone said.

None of the measures he presented, two of which would be voted on by public referendum, would impact employees or substantive police, including environmental policy, he said.

The two measures include repurposing existing tax stabilization funds with voter approval to close the gap and provide a three-year expected benefit of $100 million, according to Deputy County Executive Peter Scully.

The first involves an assessment stabilization reserve fund that stabilizes sewer taxes for Suffolk County residents who live in sewer districts; if residents face a tax increase of greater than three percent, the reserve fund is used to hold down the rate, Scully said. "But everyone knows it is overfunded," he said.

Suffolk County has, in the past, voted to utilize excess funding from the assessment stabilization reserve fund. "The proposed use is not a new concept. What is new is that the voters will decide whether repurposing funding" to protect against the impacts of the coronavirus is a good idea, he said.

The bill pending before the Suffolk County legislature would ask voters to decide if excess funding of $15 million should be used to "help plug the coronavirus gap," Scully said.

The bill would also ensure that, if the measure was approved, there would still be an adequate amount of funding to meet the stated goal of stabilizing sewer taxes, Scully said.

"It seems fairly simple. It is overfunded, there is excess sitting there that is of no real benefit to taxpayers," Scully said. "This would allow it to be used to stabilize county finances in the face of a dire situation."

The second bill would "repurpose tax stabilization funds," Scully said. Currently, he said, under Suffolk County charter, a quarter percent of sales tax is divided for tax stabilization, open space preservation and water quality.

With voter approval, the bill would allow the county to reduce the percentage of funding in the open space part of the fund and increase it in the tax stabilization portion, to "protect taxpayers with no negative impact on the environment."

Currently, he said, 32.15 percent of the funding in the revenue stream goes to tax stabilization, and 31.1 percent, to open space. If approved, the percentage would be altered for three years, with the amount in the tax stabilization portion going from 32.15 percent to 43.25 percent in 2020 and the percentage for open space shifting from 31.1 percent to 20 percent in 2020, he said.

A shift in percentages would continue for three years, Scully said. What's important, he noted, is that the plan requires no net reduction in funding for open space programs; funding will be provided through the county's capital program so the program will continue uninterrupted.

If approved, the bills could close between $75 to $100 million of the budget gap without any negative impact, Scully said.

"We hope the Suffolk County Legislature will move the bills forward," he said.

The Legislature would have to vote by July 21 for the bills to be up for voter referendum in November, Scully said.

When asked if he believed the Legislature would support the bills, Bellone said Tuesday: "I'll tell you what I don't want to, I wouldn't want to be in the position of being a legislator who’s got to tell an employee, 'Oh, you know, we had to do layoffs. You know, this was too tough to do. This thing that doesn't impact any programs, any taxpayer, doesn't require layoffs, I'm sorry.' Or to say to a taxpayer, “You know, sorry. You know, we had to, we had to do one of the mitigation measures that the [County Legislature’s non-partisan] budget review office suggested, so we're going to have to raise sales tax, raise energy tax.””

Even with federal help, which Bellone said he hoped would be coming soon: "We still are going to have significant financial challenges that we're going to have to deal with, still hundreds of millions of dollars over the next couple of years that we're going to have to deal with. And that means we have to make some tough decisions. But in terms of tough choices, this is honestly, this is not a tough choice. This is easy. It literally has no impact on taxpayers, no negative impact on taxpayers, essential employees, or on any governmental program. That is the lowest of lowest hanging fruit that we possibly have to choose from. Everything else we do, will be more painful than that."

But not all legislators agree. Suffolk County Legislator Al Krupski sent out a release recently discussing the county's land preservation program and the benefits of preserving farmland, open space and water access, both for giving people a place to go and nature a place to thrive — and also providing taxpayer with relief, as preserved land requires little in pricey government services.

"Past actions by previous county executives and legislators in borrowing from the money set aside for land preservation, requires that roughly two-thirds of the money collected pay debt service on prior borrowing," Krupski said. "This reality leaves us with very little money to buy open space and preserve farmland in the whole county. Currently we have zero dollars to to make offers on any property and are awaiting the release of the 2019 allocations. This is not a robust program."

Food truck opportunities on the horizon?

With Suffolk poised to move into Phase 4 next week of the state's plan to reopen the economy, Bellone discussed a new initiative meant to offer both enhanced dining options and a potential opportunity for new business ventures through food truck ownership.

Bellone today announced that the Suffolk County Departments of Economic Development and Planning and Department of Health Services will be hosting a webinar on July 7 for those interested in starting their own food truck business. The webinar, he said, will educate participants on the steps and challenges that new business owners may face as they work to get their food truck business started.

“We are working to bring our economy back stronger than ever and continue to learn what works best in regards to protecting public health,” Bellone said. “Outdoor dining has proven successful during the COVID-19 pandemic, and food trucks are uniquely positioned to adapt to the challenges posed by this crisis.”

The webinar, which will begin at 10 a.m., will discuss opportunities in the market, how to get started, the permitting process, business recovery, success stories, and mistakes to avoid. Advance registration is required. To register, click here.

There are currently 228 mobile vending vehicles in Suffolk County, offering a wide array of choices.

Outdoor dining has been a key part in reopening the economy safely, Bellone said, and the food truck industry is "uniquely positioned" to help provide additional open air dining experiences.

In a win-win, he added, the COVID-19 pandemic may spark new marketing and retail opportunities for both startup and existing restaurants and food businesses by offering consumers increased options of food, location, and convenience.

The webinar is being offered as part of Suffolk County's Business Recovery Unit, which was launched in March.

Numbers continue to look good

For the third time this month, there were no coronavirus-related deaths in Suffolk County over the past 24 hours, Bellone said.

The infection rate, which was up to 1.4 percent, was back at 1 percent Wednesday; the total number of positive cases increased by 42 to 41,427; there are currently 19,270 positive antibody tests reported.

Hospitalizations increased by seven to 73; the number of patients in ICU decreased by one to 23. Hospital capacity stands at 3,045, with 928 beds available, or 70 percent capacity; there are 204 of 473 ICU beds available, or 57 percent capacity, Bellone said.

A total of six people were discharged over the past 24 hours in Suffolk County.