Members of the consulting firm O’Connor Davies gave a presentation at Tuesday’s joint meeting of the Rockland County Legislature Planning & Public Works and Budget & Finance committees on the county executive’s proposed 2013 budget.
Nicholas DeSantis and Alan Kassay gave the presentation, reading from their 74-page report on the proposed budget, which the legislature will vote on at the Dec. 4 meeting next week. The report detailed possible flaws in the budget, including $17.1 million shortfall in the sales tax revenue, of which the report attributes $13.6 million to the additional sales tax the county anticipated in 2012 but did not receive state approval for.
The report also calls for a roughly $2 million shortfall in real property taxes and suggests the county establish a $2 million overlay for 2013.
The two also went over a summary of their findings, broken down into favorable and unfavorable variances for 2012. Unfavorable meaning that when compared to what was estimated as a revenue in the budget, the actual number falls short, and favorable meaning the projected revenues are more than what was expected in the budget.
“When you look at the total numbers, you have $28.2 million in unfavorable variances and $4.6 million in favorable [for 2012 revenues],” DeSantis said. “So, quite clearly, you have $23 million-plus in unfavorable revenue related to 2012.”
The net result for 2013 is about $19.3 million, but DeSantis said it could be about $7.3 million if the legislators remove a $12 million appropriation to reduce the deficit from the budget. He suggested removing it because the figure was tied to the sale of assets from the Summit Park Nursing Home, which DeSantis said most likely won’t be completed in time.
“In the budget there was a sale of assets of $12 million, which was related to selling the assets of the nursing home to an [Local Develop Corporation] corporation and to eventually a third party,” he said. “On the other side of the budget, there was $12 million to reduce the accumulated deficit in the general fund. Based upon our understanding of generally accepted county principles for governmental entities, in all likelihood, you’re not going to be able to recognize that $12 million as a revenue in 2013 because it’s not likely that you will have completed the entire sale of the nursing home at the end of 2013.”
Without the deficit reduction, DeSantis added that the firm’s projections currently anticipate the county’s deficit could grow to $114 million in the general fund.
“I don’t know that revenue alone is going to get you out of the mess, and certainly cuts alone are not going to get you out of the mess,” he said. “I either heard or read recently that personnel can be eliminated without layoffs and infrastructure can be improved, and I don’t see how that can happen.”