DiNapoli: St. Lawrence County in trouble, needs a financial plan
Photo: Tax Credits, Creative Commons, some rights reserved
Apparently St. Lawrence County needs to get a “long-range financial plan.” That’s according to an audit of the county’s financial situation that New York State Comptroller Thomas DiNapoli issued today (interesting charts within!).
In a press release on the audit, DiNapoli is quoted as saying the county is “walking on a financial tightrope…without sufficient cash available for managing unforeseen events or closing budget shortfalls.” That sounds terrible. But what does it mean, and how did we get here?
State auditors found that between 2007 and 2011 the county’s fund balance in its general fund decreased 68 percent from $21.3 million to $6.9 million. Unexpended surplus funds, which are the portion of that balance that’s not allocated for another purpose and is available for use, went from $11 million in 2007 to -$1.7 million (that’s $1.7 million in the red) at the end of 2011.
How? DiNapoli’s report says that county officials “relied heavily” on those funds to close budget gaps and keep tax rates stable. And they’d included a nearly-$4 million appropriation from those same funds for the 2012 fiscal year, which means at the end of that year there would be a deficit of $3.6 million.
Here’s a little more from that press release:
Audit findings also included:
· In September 2011, the county incurred a cash flow shortage in the general fund that required the issuance of a revenue anticipation note of $8.5 million against the state and federal aid revenue to be received in 2012. This cost the county $260,742 in interest payments;
· The Board of Legislators has requested state legislation that would allow it to increase its sales tax rate from 3 to 4 percent, which county officials project would initially generate an additional $12 million annually;
· The board passed a local law to override the state’s property tax cap and increased the county’s tax levy by $6.7 million (14 percent) to $53 million for 2013; and
· The county is deferring some work on roads and bridges and delaying purchases of vehicles, equipment and computers because of its cash shortfall.
The report’s not all about being hard on county officials, though. It acknowledges a number of demographic issues that have “contributed to St. Lawrence County’s poor financial position:” A population that’s not growing; “relatively low” median income ($49,390 versus an average of $56,951 for counties across the state); and a relatively high poverty rate (17.6 percent versus 14.5 percent statewide); and a high (10.2 percent versus 8.2 percent statewide) unemployment rate.
DiNapoli recommends something I’m sure county officials will find very simple and easy to do (this doesn’t always come across in print, but I’m being sarcastic): “develop a fund balance policy that establishes a reasonable amount of fund balance to be maintained in order to meet the county’s needs, provide sufficient cash flow, and reduce or eliminate reliance on short-term borrowing.”
I’m sure said county officials will have something to say about this.
Well, Nora, with our deep, expansive tax base, that policy is a snap!
Snark.
“DiNapoli’s report says that county officials “relied heavily” on those funds to close budget gaps and keep tax rates stable.”
It may seem nit-picking, but I would question how one could say that tax rates were kept stable. That seems to suggest that poor decisions were made in an effort to benefit the taxpayer. I think that is intellectually dishonest.
The St. Lawrence County Legislature has made poor decisions with the use of the fund balance to pay for other poor decisions. There is a leadership vacuum within the legislature.
Unfortunately, the legislators decided to hitch their wagons to Ms. St. Hillaire’s star in the role County Administrator. While Mr. Brining was an abrasive person, he knew how to manage. Ms. St. Hillaire does not.
I can’t really speak to this — the language was actually from DiNapoli’s press release. Here’s that sentence, quoted in full. Hope this helps!
“County officials relied heavily on the county’s unexpended surplus funds, the portion of fund balance that is not reserved for another purpose and available for use in future budgets, to close budget gaps and keep their tax rate stable.”
Well something has to change. Probably a combination of increasing property and sales taxes and reducing spending. We spend a lot as a County government we really do. Yes we have to keep plowing and maintaining our roads and yes we have to help people in need, but there are areas that can be cut.
Of course the other option is to actually have a growing economy rather than a pocket of poverty with 11% unemployment.
We need real jobs with real employers, jobs with benefits and salaries, that means welcoming corporations and helping our largest employers not living off the taxpayers. (Right now the largest employer in the County IS the County and other government entities). It is a recipe for a slow death.
Government, schools and even many businesses are burdened by pensions and health insurance.
If you think the solution is laying off more workers, you will be well on your way to a death spiral.