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Bellone Faces Big Challenges

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By Karl Grossman

Now comes the hard part for Steve Bellone: leading a Suffolk County government which has been battered — like governments and families across the nation — by the recession.

He’s to be sworn in as county executive next Friday — on December 30, two days short of the first of the year when he officially takes office. Why the early swearing-in?  January 1 is a Sunday and if the ceremony happened then, the county would have been required to pay double-time-and-a-half to county employees taking part. So to demonstrate from the outset that his administration intends to be frugal, the Friday event was arranged. Frugality, however, will go only so far in aiding the finances of Suffolk government.

The county’s budget is now dependent big-time on sales tax receipts — and they have been hurting ever since the recession began. Once, the property tax was the foundation of Suffolk government’s budget. But after a sales tax was instituted here in 1969, the county shifted — increasingly — to getting its income from the sales tax. It’s less politically sensitive. A jump in the property tax leaves people screaming. That’s the main reason Patrick Halpin two decades ago was a one-term county executive. He pushed for a substantial jump in the county property tax, ended up with the moniker “High Tax Halpin,” and lost his bid for reelection.

It seems the sales tax can be inched up slowly with less public reaction. It now provides for half of the county government’s budget, which in recent years has gone to well over $2 billion. Suffolk is among counties in the state most reliant on the sales tax. Federal and state aid, grants and fees — and property tax — make up the rest. And the property tax provides just a small fraction to the budget. (On a property tax bill, school taxes constitute the major share.)

All Suffolk government received from the general fund property tax last year was $32 million — a drop in the bucket considering a county budget of $2.58 billion (it’s to be $2.74 billion in 2012). Will Mr. Bellone take the political risk and try to hike the county property tax? Further, the property tax would need to skyrocket to make any difference. A three percent hike in that $32 million, for example, would raise just $1 million.

Mr. Bellone will seek to cut expenses. But county government has already been severely cut back. To economize further, it has approved a lay-off of 88 employees next month — and 600 more if necessary in July, causing Legislator Jay Schneiderman of Montauk to question “whether we will be able to deliver mandated state functions” if that happens.

As to an increase in the sales tax, it’s 8.625% now (county, state and MTA combined). That’s plenty high. But it might be claimed that it’s higher elsewhere. Still, state approval is necessary for an increase, and the Republican-controlled State Senate would likely not go along.

Meanwhile, there are some on the Suffolk Legislature who would raid funds dedicated for open space and farmland preservation, a basis for both tourism which brings in billions and an agricultural industry that continues to make Suffolk the top farming county in the state in value of annual produce. If Suffolk is covered by suburban sprawl, kiss these industries goodbye. And there’s a drive to construct sewers with the claim this will boost the economy. Years back, there was the $1 billion Southwest Sewer District fiasco in western Suffolk, and now there’s no longer massive federal support for sewers. What stance will Mr. Bellone take on these schemes?

The dilemma Mr. Bellone faces is outlined in a report on the 2012 county budget by the Budget Review Office of the Suffolk Legislature. It states:  “Suffolk County is not alone in the problems we are experiencing. Governments at all levels, federal, state and local, are experiencing dramatic decreases in revenue…The poor economy is a major contributing factor to declining sales tax and weak property tax collections.” It says “the county has relied for far too long on sales tax” and charges that the “budget does not address the structural imbalance that was created by over-reliance on sales tax.”

“The new county executive will be faced with the significant challenge of operating a county based on a budget that may not be balanced,” it says, concluding:  “Downsizing to core missions is unavoidable in the current climate.”

The economy may get better — and sales tax collections improve. Holiday sales have been strong. Will Santa Claus come to the rescue of Steve Bellone and Suffolk government? And will any sales tax rebound continue?