Press-Republican

December 14, 2012

Essex County treasurer warns of 'fiscal cliff' ahead

By LOHR McKINSTRY
Press-Republican

---- — ELIZABETHTOWN — Essex County Treasurer Michael Diskin has warned county lawmakers they could be approaching a fiscal cliff next year at budget time.

Diskin said he and Essex County Department of Social Services Commissioner John O’Neill recently held an emergency meeting with 18 of the county’s 25 department heads.

“It appears there will be a hole of at least $8 million going into budget time next year,” Diskin said. “The outlook for 2014 is going to be very bleak.”

PLANNING COULD HELP

This year, the County Board of Supervisors used $4 million of its fund balance, along with $2.8 million in anticipated Federal Emergency Management Agency reimbursements for last year’s flood, which would have been added to the fund balance.

The FEMA money was a creative revenue source, along with $565,000 of an anticipated $1.9 million in revenue from a property-tax sale that hasn’t been scheduled yet.

It certainly will require some tough financial planning next year, said Supervisor Thomas Scozzafava (R-Moriah), who chairs the County Finance Committee.

“I don’t see us falling off the fiscal cliff in 2014, 2015. I fully support this (2013) budget. I feel confident next year we’re not going to be in dire straits; we’ll find ways to reduce expenses.”

Scozzafava said he’s concerned some county officials are now “crying the sky is falling” without justification.

“Where were they for the last five or six years? This gloom and doom picture is coming from people who were in disagreement with the budget.”

He said they used substantial portions of the county fund balance before to balance the budget.

“Fund balance is taxpayers’ money. To say you need to carry $10 million in fund balance is not right.

“I also don’t understand where the county treasurer or the county manager are coming from to say we shouldn’t use the FEMA money to reduce taxes for our constituency.”

PAY FREEZE

O’Neill said management-confidential employees at the county, after two years of no raises, at least got 2 percent pay increases in the 2013 budget.

“When people don’t get a raise, it results in a decrease in pay due to inflation. It’s a real disincentive to us promoting people from within.”

O’Neill said he promoted two people who ended up making about the same as those in lower-ranking positions because of the pay freeze.

TAXES TO RISE

Diskin said Federal Insurance Contributions Act (FICA) payroll taxes are due to go back up from 5.65 to 7.65 percent on Jan. 1, so workers will be taking home less money.

“It has been predicted that the average wage earner will be paying at least $1,000 more in taxes in 2013. It’s a major concern to people.”

SMALLER SURPLUS

The 2014 county budget will include a much lower fund balance, so there won’t be much of a safety net.

“I personally have some real concerns about our ability to meet the everyday needs of having enough available funds to meet payroll and weekly accounts-payable checks,” Diskin said.

“We are right now operating on a tightrope every time we have to meet a payroll or pay weekly bills.

“I am not trying to scare anyone but merely stating my opinion based on what I see coming down the very short road.”

Board of Supervisors Chair Randy Douglas (D-Jay) said he wishes Diskin had shared some of his information with them earlier.

“He never once came to me and said he was having a hard time making payroll. If we’re having such a fiscal cliff, we shouldn’t be having 2 percent raises (for department heads). You can’t have it both ways. Mr. Diskin is getting a 2 percent raise. I am not getting a raise.”

He said he believes Diskin is doing an excellent job as treasurer.

“He works hard. He is a great county treasurer. I disagree with him on this.”

Diskin also said the county may not be able to provide all the services it does now.

“We’re committed to provide the appropriate level of services within our fiscal constraints. Department heads want to be a part of the process. We stand ready to help (the Board of Supervisors) in the process.”

Diskin suggested the county adopt a three-to-five-year spending plan “on where we are headed and how (the board) plans to guide us there.”

On Dec. 10, the county passed a 2013 budget with a 1.1 percent tax levy increase, meeting the state tax-cap formula for the county — but using $6.8 million of the county’s $8.5 million reserve and $2.8 million in FEMA payments to balance a $108 million budget.

Email Lohr McKinstry: lmckinstry@pressrepublican.com