Wall Street woes: county fallout

Will state shift more costs to county?

By FRITZ MAYER

MONTICELLO, NY — Even if you don’t own any stocks or mutual funds, if you live in Sullivan County or any other county in the state, you might still feel the aftershocks of the recent turmoil on Wall Street.

For even if the federal rescue of the banking industry, engineered by the Bush Administration and Congress, is successful, it is already too late to stop the loss of thousands of jobs in the financial sector and the loss of revenue to the state.

New York State gets about 20 percent of its revenue from Wall Street. One analysis, reported by the Associated Press, projected that as much as $3 billion in state revenues may be lost. That could mean another attempt by Governor David Paterson and other officials in Albany to shift more of the cost of government from the state to the counties.

After the county meeting on September 18, Sullivan County Manager David Fanslau was asked if this was a concern.

“We’re seeing the threat of reduced state aid and the reduction in reimbursement levels generally,” he said, “I had given that warning out back in August when Governor Paterson had proposed to reduce the county budget by $1.25 million. Paterson had requested a six-percent reduction in state aid. The state legislature did not move forward with his recommendation, but my concern is that they will move forward with it before the end of the calendar year. And, of course, all of that was before the turmoil on Wall Street.

“I’m not an expert on the happenings on Wall Street, but my concern is, when you look at a lot of the news reports, if this is ongoing, it will push out a recovery further, and certainly as far as revenue projections for sales tax, it could have a significant impact.” He added that it might lead to a reduction in state aid.

“However, what I said in August, and what I’ve said repeatedly, is that the legislature at the county level needs to reach out to senator John Bonacic and assemblywoman Aileen Gunther to say that as the state shifts costs to the counties, and cuts back on its aid, they should also provide a mandate relief. Most of these [mandated programs] are entitlement programs, and mandates from the state government that the state provides little or no funding for. So if the state is going to recognize that it has economic issues and budget issues to confront, the state needs to be serious and get rid of some of these unfunded mandates, and allow the county to make its own decisions on what programs it would fund and offer. Without that, the only option we have is to raise property taxes to cover the loss of state funds.”

Many of the unfunded or under-funded mandates Fanslau referred to are programs that come through the departments of public health, community services and family services. But, he said, there are mandates in many departments. For example, he said, “There is a mandate that the county have a probation office. The probation office was originally funded at a 40 percent level, and right now we get funded at a 17 percent level.”

Fanslau is not alone in his frustration with unfunded mandates; county lawmakers routinely bemoan imposition of new mandates when they are handed down from Albany.