LITTLE VALLEY - Cattaraugus County lawmakers are expecting a shortfall of nearly $5 million as they begin preparing their annual budget.
During upcoming weeks, county departments, Administrator Jack Searles and the county's legislature will look at all programs and services in their search to find ways to reduce expenses, increase revenues and improve efficiency in light of the shortfall. Searles has directed department staff to prepare budgets for each with no more than a 2 percent increase in the amount of money they get in taxes than they received last year.
According to county officials a state property tax cap on the amount to be raised by taxes was initiated despite state mandated and contractual obligations increasing in the county.
"The projected increases in these mandates alone account for the amount allowable to be increased under the property tax cap law," county officials report, adding they are mandated to provide Medicaid, Safety Net funding, state retirement pension contributions, community college chargebacks, child welfare, pre-kindergarten, early intervention programs, along with defense to indigents, probation programs and youth detention.
"In the case of the department of Social Services, the increase in Medicaid costs alone will exceed their allowable 2 percent by more than $100,000," officials report.
In 2012, officials said, the county will be required to pay Medicaid costs of $18,462,750, a $537,800 increase. Other mandated services and programs are expected to have similar increases of about 2.9 percent to 4.4 percent, totaling an additional $497,500 in increases.
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"The projected increases in these mandates alone account for the amount allowable to be increased under the property tax cap law."
Cattaraugus County officials
"At the same time as the county's share of mandated programs increase, there have been reductions and elimination of both federal and state revenues for other programs the county provides to residents," said officials via a press release issued Monday. For instance, they report, the AmeriCorps program has been eliminated by the federal government, and Even Start is only funded through July 2012. Reductions in state or federal funding are expected in probation, health, courts, nursing homes. The county has also not received $931,500 in casino revenue sharing and $607,000 in other federal funding.
In addition, officials said, contractual obligations will result in increased costs in health insurance, workers' compensation and collective bargaining agreements. A projected increase of about $1.9 million is expected.
County lawmakers recently decided to seek proposals to help them evaluate their two county-owned nursing homes in Olean and Machias. The Pines Healthcare and Rehabilitation Centers have had to be subsidized by the county budget. Searles said about $2.5 million was needed to help the homes in 2011, with another $3.5 million projected for next year. Although some of that may be offset, lawmakers recently voted to hire a consultant to help evaluate options for the homes' future "public and or private ownership/operation" of the homes. Searles said firms have until the end of September to submit proposals at how to make the homes more efficient or save money when lawmakers will then vote on hiring one of the firms that have submitted proposals.
All totalled, the impact for the budget is expected to result in a $4.1 million to $5.3 million shortfall.
Lawmakers are expected to review using fund balance left from previous years to offset increases in costs and revenue reductions. The fund balance stands at $$19.8 million, however, that is below the level recommended by the state Comptroller's Office.
"These decisions need to be carefully reviewed, especially in the current tax cap environment as the funds will no longer be available for future years," they report.
A tentative budget is expected to be released on Nov. 9.