Picente: County finances in dire shape

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UTICA — Oneida County Executive Anthony J. Picente Jr. warned county legislators Wednesday that drastic steps are needed in county and other local
government to cope with a revenue shortfall from the COVID-19 pandemic.

Picente gave a lengthy address to the Board of Legislators’ at their July meeting at the Oneida County Office Building, 800 Park Ave., in which he said the combination of shortfalls in budgeted sales-tax receipts, state revenue sharing and Medicaid support and expenses from responding to the pandemic have left the county facing its worst fiscal crisis in nearly 30 years.

Picente got authorization from lawmakers to negotiate with county employee unions on an early-retirement package he outlined.

He also said he’s asked department heads and elected officials to develop 2021 budgets 15% smaller than this year’s. He warned that without drastic cuts, the county may face having to borrow just to meet its operating obligations. He said he wants to avoid a repeat of 1992, when he was an assistant to the then-county executive and the county had to borrow $16 million to pay its bills.

But he said it will likely take more structural changes to cope, including re-working how the county shares sales tax revenue with towns and villages, how the county fronts tax collections for schools and some local governments, and consolidation.

“This crisis is not going away any time soon. it’s going to get worse. It’s going to lead us into territory we’re unfamiliar with,” Picente said.

“This is not your typical economic downturn. This is a crisis of really epic proportions.”

As of Wednesday’s date a year ago, the county had $30.7 million cash on hand for paying expenses. This year, it is $11.3 million, Picente told legislators.

Among coping strategies, the county has spread out revenue sharing with towns and villages, and likely will again into the fall, Picente said. He said he understands that villages and towns are short in revenue, but many have significant reserves and do not have the responsibilities that county government does, such as child and elderly welfare.

Dealing with the pandemic, including vital tracing the contacts of people with COVID-19, has cost more than $3 million not counting increased labor costs, he said.

The county purchased more than $2 million worth of personal protective equipment and distributed it, such as to first responders and health care providers, and conducted two surveys of affected businesses, among other efforts.

Legislators by acclimation gave their authorization to the early retirement offer negotiations. In it, county employers age 55 and older by Oct. 1 and with 10 years of service with the county may retire and get a lump sum of $17,500 and have the county pay their share of their health insurance premiums – 20 percent of the total — for three months. The offer will also be extended to employees who meet the age and service requirements by Dec. 31. Employees have to give notice of accepting by Aug. 31.

About 130 employees are believed eligible, and if all take it the savings could be significant, though the exact amount can’t be known until it’s known who takes it. While the workforce may be leaner afterward, some jobs would have to be filled, but the new employees would likely have lower salaries and benefits costs.

Estimates of how much the county’s sales tax revenues are behind what was budgeted have varied, but Picente put it Wednesday at about 33 percent. It’s the largest revenue source in the county’s budget, at about 24 percent.

Picente also noted, however, that the $20 million the county budgeted this year from its share of Oneida Indian Nation gambling operations is endangered. The Nation closed its casinos in mid-March and reopened its flagship Turning Stone Casino Resort in Verona only in mid-June.

The county has cut spending through relatively small steps like reducing non-essential travel, renegotiating some contracts and support for small non-profits and libraries, but that’s not going to be enough, Picente said.

As for consolidation among local governments, it is time to go beyond piecemeal steps, the county executive said

“We need to revisit that and look at ways, whether it’s in law enforcement, fire service, public works – all of it should be on the table, and it should be taken seriously,because of the financial situation not just we are in, but all governments are in.”

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