Ulster County residents will see a small decline in their tax bills under a budget proposal put forth by County Executive Mike Hein last week.
Hein’s proposed 2017 spending plan totals $324.82 million, $5.57 million less than the current budget and calls for a 0.25 percent decrease in the tax levy, about $200,000. Property taxes are expected to account for $76.89 million of the county’s income; another $231.59 million will be generated by anticipated revenue including sales tax and state and federal aid. The budget also uses $16.34 million from the county’s reserve funds.
Hein unveiled the budget proposal, which still needs legislative approval, on Friday, September 30 using as a backdrop a largely vacant county-owned building on Ulster Avenue where he hopes to relocate Ulster County Family Court as a cost-saving measure. In his speech, Hein noted that his proposed 2017 budget was the fifth in a row to include a property tax levy cut, leaving county taxes at their lowest level since he first took office in 2010. But Hein also warned that skyrocketing health care costs — made worse by an ongoing dispute between insurer Empire Blue Cross/Blue Shield and local healthcare provider HealthAlliance of the Hudson Valley — posed a major threat to the county’s financial position. Hein’s budget projects an increase of $4.5 million, 20 percent in county healthcare costs next year.
“Unsustainable escalations are happening all across the nation and healthcare costs are becoming a huge problem for governments, businesses and citizens as well,” said Hein. “The reality is, these costs are outpacing tax caps, cost of living increases and reasonable analysis.”
Hein also noted that 2017 will be the first year that the county absorbs all of the costs associated with the Safety Net welfare program. The welfare costs were previously paid the communities where recipients reside. Hein said he expected the welfare program to add $7.2 million to the county budget in 2017. Hein also noted rising personnel costs and a sharp decline in revenues generated by boarding out-of-of-county inmates at the Ulster County Jail as challenges in developing the 2017 spending plan.
Overall, despite a slight decline in individuals seeking temporary cash benefits, social services remained the county’s largest expense accounting for 36 percent of Hein’s budget. Other major spending areas include “general government” which accounts for 20 percent, and employee benefits, which account for 16 percent of the total. Another 3 percent of Hein’s budget is set aside to service some $122.4 million in debt held by the county.
Since taking office, Hein has instituted a series of cuts and reforms that that have trimmed hundreds of workers from the county payroll, sold off county property and, perhaps most notably, sold the county’s money-losing nursing home to private investors. In his address, Hein said he planned to continue to trim the county workforce using a targeted retirement incentive to shed certain senior employees who will not be replaced. Overall, Hein said that reforms had reduced costs by more than $35 million and allowed the county to continue to cut taxes while maintaining or improving services.
Moving Family Court
In addition to the retirement incentive plan, cost-saving measures called for in Hein’s budget include moving Family Court from its current location in a rented facility on Lucas Avenue to the largely vacant county-owned Business Resource Center on Ulster Avenue. Because the court facility would be located outside the county seat (800 feet into the Town of Ulster) the plan needs voter approval next month. Hein used his budget address to urge voters to vote yes a ballot item to move the court, saying the move would save taxpayers $10 to $30 million that would otherwise have to be spent to comply with a state mandate to expand the Lucas Avenue courthouse.
“Simply put, moving family court operations here provides the best of all possible outcomes at the best possible price for taxpayers,” Hein wrote.
Hein said his budget also included an emergency provision in the event the state fails to approve a 1 percent extension of the county’s sales tax next year. The 1 percent extension is subject to state legislative approval every two years. In 2014, Assemblyman Kevin Cahill held up the extension as leverage to encourage Hein to speed up the pace for assuming Safety Net costs from the towns and the City of Kingston. The resulting standoff cost the county more than $5 million in sales tax revenue.
To avoid a potential repeat of the 2014 sales tax crisis, Hein said that going forward, agencies that work for the county on a contract basis would be paid quarterly. The new schedule would give the county flexibility so that, if the state legislative session ends in June without the sales tax extension, fourth-quarter payments to the contractors could be suspended in order to avoid a year-end budget shortfall.
“I pray that this scenario is never forced upon us,” said Hein. “But simply put, we cannot spend money we do not have or irresponsibly undermine the very foundation of public health and safety by ignoring this possibility.”
Along with the cost-saving measures, Hein announced a series of new or continuing initiatives for county government. They include $15 million to continue funding the “Building a Better Ulster County” infrastructure improvement project. The county-financed program, which began in 2015, funds repair or replacement of aging roads and bridges and upgrades like wider shoulders and better pedestrian access.
Hein, who touted Ulster recent state designation as New York’s most environmentally friendly county, said he had also included money for five new public charging stations for electric vehicles and 11 new plug-in hybrid gas/electric vehicles for county use.