Democrats want to shrink deficit payments to $4M per year

BY DYLAN SKRILOFF

Democratic leadership in the County Legislature is hoping to reduce the annual payments on the county’s deficit to $4 million in order to fully restore proposed cuts to the Sheriff’s Dept. in County Executive Ed Day’s proposed budget, the Rockland County Times has learned. The original budget contained a $10 million payment as currently required by law and a compromise of $7 million is also being discussed.

[Update — The proposed budget passed by the Budget and Finance Committee controlled by Democrats ultimately contained a $5 million payment on the deficit]

Democrat Jay Hood Jr., an outspoken opponent of any cuts to the Sheriff’s Dept., said, “I believe the proposal [being discussed] will pay the additional deficit over 10 years, which was always the plan; 10 percent a year. That’s why we passed the law to begin with before we had the deficit bond, which is $96 million or $10 million per year. The plan is in line with the deficit bond payments and the original plan. I don’t believe the comptroller or the rating agencies will have a problem with it. Paying $10 million a year is not realistic with the deficit bond also due.”

However, County Executive Day said reducing the annual payment to $4 million will be looked at negatively by credit rating agencies and could lead to a reduction of the county’s prospects in the bond market. Day provided the Rockland County Times with an opinion from county auditor Robert Bergman that stated the comptroller might look at such a reduction as a “bait and switch” move. The NYS Comptroller’s Office had recently offered a positive of appraisal of steps Rockland had taken to get its fiscal house in order, including mention of the $10 million deficit payment.

Day said improved bond ratings could save the county tens of millions of dollars over the next decade and blasted the legislators for risking that income. Day said he is amenable to Leg. Chris Carey’s recently proposed compromise that would reduce the deficit payment to $7 million this year.  The county executives hopes the county can then pay off the rest of the deficit, which currently stands around $40 million, over the next three years. The county’s anticipated sale of Summit Park hospital and nursing home in 2015 is being relied on to increase future payments.

In order to meet the original $10 million deficit payment, Day proposed cutting all funding to non-profit contract agencies and and 111 jobs, including 37 police jobs through the elimination of the entire Sheriff’s Patrol Division. Following much public debate over the cuts, Leg. Carey proposed the compromise $7 million payment on the deficit and the restoration of 75 percent of funding to non-profits and 23 of 37 Sheriff’s patrol jobs. In addition, under the Carey compromise, the county would pass $1.8 million in community college chargeback costs back to the five towns.

A recent state Appeals Court ruling pertaining to Nassau County found that such costs are ultimately answerable at the town level of government, even though Rockland has traditionally covered them at the county level. The chargebacks had been put in place two years ago, before being repealed last year. Day said that an unexpected influx of sales tax revenue will insulate the towns from any budgetary hit on the $1.8 million.

The politics of the situation are not set in stone. At least two Republicans-Douglas Jobson, Jr. and Patrick Moroney-are reportedly on the fence about Carey’s proposed budget and are considering making a different compromise with Democrats. On the other side, Democrat Joseph Meyers has been 100 percent behind Day’s cuts to the contract agencies and Sheriff’s Dept. cuts from the get go, stating that he proposed the same cuts several years ago.

Rockland County Democratic Party Chairwoman Kristen Stavisky boasted that she believes Democrats have the votes to override Day’s budget. In order to override a potential veto, the Legislature needs 12 votes. She stated in a social media conversation, “Day and Carey can wish all they want. I believe the Democratic legislators and a few principled, truthful Republicans will craft a better plan.”

At Monday’s public budget discussion, Democratic legislators acknowledged that the reaction of ratings agencies is important to consider in making any changes to the deficit repayment law. Budget and Finance Committee Chairman Michael Grant stated, “We want to do at least what will keep us on target to pay [the deficit] off, and apparently there are some considerations for what’s in-between.”

Legislator Ilan Schoenberger said, “In my mind the most important thing the ratings agencies want to see is an end to the hemorrhaging.”

Day told the Rockland County Times if the legislators were really concerned about the county’s credit, they would not consider lowering the annual payment below $7 million.

If the Legislature cannot come to any agreement satisfactory to County Executive Day or muster a compromise that secures 12 votes to override Day’s veto, then by law Day’s original budget will go into effect.

The county was nearly $140 million in the hole before taking out a deficit bond note in 2013 for $96 million to be paid back over 10 years. In 2012 the county passed a law requiring an annual payment of $10 million on the county’s deficit.