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Administrator Releases 2017 Recommended Budget

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Administrator Releases 2017 Recommended Budget

Tuesday, September 6, 2016

Tompkins County Administrator Joe Mareane has delivered to the County Legislature a 2017 Recommended County Budget. The budget proposes modest spending growth of less than one percent, stability in current programs, and the alignment of resources with priorities that include adaptation to climate change, reductions of the County’s jail population, regulatory compliance, and a diverse, well-trained, motivated workforce.

The Recommended Budget supports total expenditures of $173 million (an increase of 0.8%) and local dollar spending of $84.7 million (an increase of 0.9%). It meets the Legislature’s 2017 budget goal of a 3% increase in the County property tax levy. Due to a substantial 4.5% increase in the county’s tax base, which spreads the cost of government across a larger base, the budget contains a property tax rate that will go down in 2017—from $6.73 per $1,000 to $6.63 per $1,000—a reduction of 1.5%. This is the third consecutive year that the tax rate has decreased, and is the lowest rate since 2011. Under the Recommended Budget, the County property tax bill for the owner of a median-valued $175,000 home would increase by $16.

“In many ways, our Budget continues to benefit from a strong economy, Administrator Mareane notes in his annual Budget Message to the Legislature, citing reductions in the cost of mandated human services programs, low inflationary pressures, and robust growth in the countywide property tax base.

In spite of signs of a healthy local economy, the 2017 Budget is shaped by declines in sales tax revenues have been recorded since the end of 2014. “Sales tax revenue—the only major source of County revenue that generally grows with the economy—is not growing,” Administrator Mareane said. “In fact, receipts have declined in five of the past six quarters and are projected to fall well-short of the 2016 budget target. Even with the anticipation of modest growth returning next year, the 2017 budgeted sales tax estimate is down by $694,000 from the 2016 budget.” With only two major sources of local revenue—the sales tax and the property tax—the reduction in sales tax means that $694,000 in budgetary support must be shifted to the property tax. That shift is responsible for a 1.5% increase—or half of the overall rise—in the tax levy. The Administrator calls the odd phenomenon of declining sales taxes in the midst of a robust economy “the defining characteristic of the 2017 County Budget.”

The recommended tax levy increase, Mareane said, is made up of three elements: 1.5% attributed to the drop in sales tax revenue; 0.5% for the County’s policy-based increase in levy for capital improvements; and 1% for everything else. The recommended tax levy increase exceeds the County’s estimated State tax cap of 2.22%

Among other major influences on the budget:

-- Labor Costs: Overall labor costs have increased by 1.3%, reflecting the combination of wage and benefit growth and changes in the workforce roster. The budget includes 10.8 additional full-time equivalent positions compared to the 2016 adopted budget, most of those already created in 2016 and funded with grants or other non-property tax revenue. Only 1.7 FTEs—including a Human Resources Associate in Personnel and a half-time inspector in the one-person Weights and Measures department—require over-target funding. The recommended personnel roster remains 6% below the 2009 peak level.

Health benefits costs reflect a 5% premium increase for 2017 approved by the Greater Tompkins County Health Insurance Consortium, which is far below typical market rates. Through the County’s negotiated employee contracts, new hires also are enrolled in the Consortium’s less costly “Standard Platinum Plan”. A slight decrease in the 2017 pension rate (from 15.5 to 15.3% of payroll), just reported by the State Comptroller, has produced savings that enable the County to increase the Contingent Fund budget, to help mitigate the risks of uncertain sales tax collections and potentially higher jail costs.

-- Mandates: The budgeted cost of State-mandated human services programs has declined for the second consecutive year. The $21.3 million local-dollar cost of mandates is expected to fall by $143,000 from the 2016 budgeted level. Although the County’s $11.6 million bill is relatively stable (up by $87,000), this contribution to the State’s Medicaid program continues to be the County’s largest single expense and represents 25% of the County’s 2017 property tax levy.

A recommended $100,000 increase in the Assigned Counsel budget compensates for anticipated State-imposed changes in income eligibility thresholds that would greatly expand the number of people eligible for County-funded attorneys, should new legislation, now awaiting the Governor’s signature, not be enacted. That legislation would authorize a multi-year State takeover of mandated indigent defense costs.

-- Capital Reinvestment: $233,000 will be added to the tax levy to pay for infrastructure improvements, most funds applied to pay debt service on projects already authorized by the Legislature. Included is a new “Natural Infrastructure” program, funded at $200,000 each year of the Capital Program, targeted at helping the community adapt to the effects of climate change including increasingly extreme weather patterns—supporting projects to address surface water, flooding, and groundwater issues.

The Administrator cautions that risks within the Recommended Budget include “the looming unbudgeted expense” associated with the State’s push to reduce the Tompkins County Jail population level. While the State recently extended the jail’s 18-bed variance through the end of this year, Mareane warns that any future revocation of the variance by the State Commission of Correction would produce an immediate unbudgeted increase in inmate board-out costs. The Contingent Fund budget was increased in 2017 to mitigate that risk, as well as those associated with potential uncertainties regarding Assigned Counsel funding and future sales tax collections.

“I wish to thank County Department Heads and Agency Directors, and their staffs, for their professional approach to the challenges that mark every budget,” Mareane states. “All exercised the restraint we requested, and continue to find ways to maintain service levels, provided with high quality, to the community.” He also recognizes the Legislature for its ongoing actions to establish clear policy guidance and instill a culture of fiscal discipline and responsiveness to community needs that has shaped this budget and many before it.

Legislators will review the recommended budget in detail at the first meeting of the County’s Expanded Budget Committee (any legislator may participate) on Thursday, September 8, 5:30 p.m. in Legislature Chambers, Governor Daniel D. Tompkins Building, 121 E. Court Street (Second Floor), Ithaca—the first in a series of meetings that will continue through September and October.

The 2017 Recommended Budget is posted on the County website at www.TompkinsCountyNY.gov/ctyadmin/2017budget.  

Public copies of the Recommended Budget are available for review at the County Administration office, 125 East Court Street (3rd Floor), and at the Office of the County Legislature, 121 East Court Street.