MALONE - Budget-balancing talks have started in Franklin County.
On Friday, the Board of Legislators held a special meeting to initiate the first round of discussions about the tentative county budget for 2014. The meeting came on the heels of a scathing audit recently released by the Office of the State Comptroller, which accused the county of failing to manage its funds soundly.
County Manager Tom Leitz said adhering to both the comptroller's statement that the county's contingency fund should be 1 percent of the budget and the pressure of state mandates makes it difficult to balance the budget.
"That's what the comptroller says, but the comptroller doesn't care about the tax levy in this county," said Legislator Paul Maroun, R-Tupper Lake. "What people have to remember is every time you increase it (contingency fund) $150,000, that's a percent of the levy, and the comptroller doesn't care about that. I'm not too concerned, and the taxpayers probably aren't too concerned, with having $1 million in contingency just because the comptroller says that."
Board Chairman Billy Jones, D-Chateaugay, agreed with Maroun and said county legislators have fought to keep taxes down.
"This board made a choice the last couple of years that we were going to stay under the tax cap, and we have, but instead of being recognized for that, we get slammed in this comptroller's report for being irresponsible," Jones said. "The comptroller does not care about the tax levy; he does not care that we've kept (the tax levy increase) under 2 percent for the couple of years. They just want to slam us."
The tax levy in the tentative budget is $16.2 million. That's an 8.76 percent increase from last year's, putting it way over New York state's 1.66 percent tax cap for the county.
To lower the levy, the tentative budget suggests reducing the contingency fund by $100,000, reducing spending on roads, and eliminating positions Leitz had proposed adding to the probation, treasury, public defender and conflict defender departments.
If those options are enacted, it could bring the levy increase down to 4.31 percent, but the county would still need to cut $363,497 from the budget to reach 2 percent.
The board was leery of the potential $3.5 million in net casino compact funds from the state that were included in the tentative budget to offset tourism expenses and highway maintenance equipment.
Leitz made the argument that any improvements made to roads should be considered economic development.
"If the state rejects this, I'd say we spend a substantial amount of money on various programs to take people off the welfare rolls and get them employed," Leitz said. "I'd say that's economic development. I'd argue just about everything we do is economic development. I'd argue lowering taxes is economic development."
Legislator Guy "Tim" Smith, D-Fort Covington, was concerned about using that money to balance the budget.
"I've seen it before where St. Lawrence County budgeted for this money and didn't get it," Smith said. "We're not kicking the can down the road, we're shooting in the dark, and we could hit or we could miss and be fatally wounded."
Leitz also suggested using casino money and contingency funds to pay off a portion of the county's $2.3 million in capital project funds. Those funds do not affect the tax levy, but the $18,000 interest owed on them in 2014 does.
Leitz said the county could also pay the $18,000 interest and bond the $2.3 million out over the long term, and make two bond payments a year starting in 2015.
"Fortunately, bond rates are at all-time lows, so the money is really cheap," said Legislator Tim Burpoe, D-Saranac Lake. "In the future, bond rates are supposed to go up. I think this is going to be the time to start building the general fund up to a more reasonable level. Since we don't have that much debt, it's OK to be borrowing, especially when the money's so cheap."
Leitz said the county recently took another hit when the state no longer allowed it to use Medicaid to get reimbursed for special education of handicapped students. It is expected to cost the county about $1.2 million next year.
Despite budgetary problems, Leitz proposed increasing funding for Cornell Cooperative Extension by more than the agency requested.
"For one thing, I'm pretty well convinced the agency brings economic value to us, and they've basically been operating at a deficit position for awhile," Leitz. "They're an agency that brings in six and seven figures in grants some years."
Cornell requested $269,000, but Leitz proposed $276,296. Jones questioned the move.
"We're sitting here nickel-and-diming agencies, and we're going to have department heads come in, and we're probably going to cut a lot of them, and we increased more than what one was asking for," Jones said.
Leitz defended the proposed funding increase.
"For a lot of years, their funding was basically level or increased by 1 percent or 2 percent," Leitz said. "They're really going to struggle to keep staff, even with this increase. I think their services are valued by a lot of people. They also bring significant grant dollars into the community, and I think some of the work they're doing with local farmers on the marketing side is going to provide long-term dividends."
Moving forward, Burpoe said the county's Finance Committee will look at some of the larger numbers in the budget and call on specific department heads to justify those funding levels. The committee will also scrutinize purchases over $10,000.
Contact Shaun Kittle at 891-2600 ext. 25 or firstname.lastname@example.org.