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Steve Levy- Balanced Budget with tough Decisions

October 21, 2011 @ 12:00 am EDT


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County Executive Steve Levy requested an opportunity to speak before LIMBA this morning. He believes the budget that he has put on the table will be disturbing to many, but the measures he is taking are absolutely necessary.

Among the problems are the Medicaid bills. While they were difficult enough a few years ago they are infinitely worse now. Another issue is pensions. The pensions for County employees are funded by what is known as "defined benefit" plans. This guarantees that the recipient gets the benefit outlined in the plan, no matter what the underlying investment performance. In a market where investments are falling, the employer must inject extraordinary amounts of new cash to meet the "defined benefit". Of course we, the taxpayers, are the employers. The increased cost over the next two years is between $85 and 95 million. These plans are almost non-existent in the private sector because of this volatility.

Another albatross that was thrown at the county was a requirement to build a new $180 million jail, with an annual operating cost of $20-30 million. In addition, the occupancy had to be less dense than our children would experience in a college dorm. A sprung on the property of the old jail can withstand 135 mph winds. During the recent tropical storm, the state insisted that it should be evacuated even though wind were not expected to be anywhere near that strength and in fact did not exceed 55mph. The state is seeking to punish the county for not evacuating the sprung.

Levy has had some notably successes in reducing costs, one such case was to take highly paid police officers off PAL duties and office duties and other non-police functions and put them in the community doing real police work. Another successful move was using sheriff to police the highways. And while sheriff personnel receive the same training as the regular force, they are paid considerably less. This move saved about $11 million per year.

Last year Levy’s budget, approved by the legislature, called for the closure of the county owned nursing home and the same of the empty facility. The legislators too the money projected from the sale of the empty facility so that they could pay for member items — and then they joined in a lawsuit to prevent the closure. This resulted in a $20 million hole in the budget. This year Mr. Levy’s budget again calls for the closure of the nursing home again and, unless that is reversed by the legislature that will save the county $8 million this year and every year thereafter.

Mr. Levy does not like the idea of selling off assets that have a recurring use. The nursing home will never be needed again because there are alternatives. Selling off a publicly owned building to private parties, like the jail as some legislators have suggested, will create some money to pay the current bills, but if you have to rent that property back, it becomes a recurring expense that soon is far more costly than the temporary monetary gain. He gave the example of NY State selling Attica Prison, and now the state pays dearly for using that asset each year.

The county does have some disaster reserves. The legislature and the unions are suggesting that those reserves be used to cover the shortfalls. "No" says Levy, that makes us vulnerable and next year we may be faced with the same shortfall. Selling valuable assets that are owned by the people and using reserves are not the answer according to Levy. It’s not good management.

Levy admits that these are unpalatable measures, but it is exactly the type of measures that business people are making in a difficult economic environment.