I remember watching the Yankees play the Pirates in the 1960 World Series when I was growing up in Brooklyn. By all rights, the Yankees should have won that series. They outscored the Pirates 55-27 in the Series, out hit them 91-60, even got two complete-game shutouts from Whitey Ford and still somehow lost four games to the Pirates.
The three games the Yankees won were all won by at least 10 runs. That shows how it’s possible to succeed in the short-term and still falter over the long run. Which is exactly why I vowed upon taking office to implement a long-term strategy to fix the financial mess we inherited. Rockland County is making progress; we’ve even won a few games, but the Series isn’t over yet.
This year, as we work on the budget for 2019, we are being faced with significant challenges. The Empire Plan, from which the majority of County employees receive their health insurance, is raising rates 7.1%. That is on top of increases of 8.7% and 12.2% in 2018 and 2017, respectively. The 7.1% increase we face this year means roughly $4.5 million more in healthcare costs; equivalent to a 3-4% County property tax increase all on its own. We continue to face a heavy price tag for state mandates like Medicaid while state and federal aid are decreasing to many of our programs. Medicaid costs alone are a shocking equivalent to 55% of the County’s property tax levy.
Thankfully, despite these challenges we have taken steps to continue our financial recovery. Our conservative budgeting has allowed us to start rebuilding a surplus in our general fund. We have almost $6.3 million on hand but the work is far from over. It’s recommended that governments maintain an unrestricted fund balance of no less than two months of regular general fund operating expenditures. That’s between $60 and $80 million.
In plain English, this is the same as you keeping a few months’ salary in your savings in case of an emergency; it’s the minimum required to be financially responsible. Unfortunately, we are not even at the level of living “paycheck to paycheck” yet.
It’s also important to rebuild our fund balance because every year without one it costs us money. This year it cost $1.4 million for us to borrow in order to maintain our cash flow. If we had a fund balance on the level recommended this cost could be eliminated. We must continue rebuilding our financial foundation while avoiding the mistakes of past administrations. That is the real cost to the fuzzy budgeting that led to our financial difficulties; we all saw what I inherited.
Even though the economy is improving, we must continue our path of fiscal responsibility. This studied and conservative course of action is what has resulted in seven consecutive bond rating increases credited to, as Moody’s Investors Service wrote, “management aggressively worked to stay within its budget and not overspend, as it had done in previous years.”
We’ve seen this song and dance before. While a few in the Legislature, some of the same that nearly brought us to our knees, will focus on the game alone and spend without regard to consequence, I promise to continue to budget responsibly, without the speculation or guess work that resulted in year after year of double-digit tax increases. Unlike that 1960 Yankees team, I will stay focused on winning the Series even if everyone else is only concerned with today’s game.