Our Financial Picture

Our Financial Picture

This pandemic is exactly why we have spent the last 6 years focused on conservative budgeting; we will weather this storm. While it is still too early to say exactly how badly the COVID-19 pandemic will affect our 2020 budget, we know that the financial picture is not pretty. While we know we will not avoid the blow, we hope to at least soften it because of the stronger financial position we have now as compared to only a few short years ago.

That is why the rebuilding of the positive Unassigned Fund Balance or surplus in the County’s General Fund was so critical. Last August we announced that the Undesignated Fund Balance in the General Fund was $32.2 million, a surplus. This type of crisis is what we have been preparing for since I took office. Had this situation occurred even 2 or 3 years ago Rockland County would very likely have ended up insolvent and with an Unassigned Fund Balance in deficit.

Based on the estimates of our Finance Department we could be facing as much as a $56.3 million deficit for the 2020 Budget. We are facing a possible fiscal tsunami, and it is possible that our entire Undesignated Fund Balance be reduced to zero by the end of 2020.

What are we doing to avert this fiscal crisis? In mid-March we implemented austerity measures and have curtailed all non-essential and discretionary spending. We have filed and been approved for FEMA reimbursement for COVID-19 related expenses and will be filing monthly.

We have also asked our Federal Representatives to include direct financial assistance for counties in any future federal stimulus bills. We believe this funding should be distributed through a blended formula that is based on population and the number of COVID-19 infections. This direct funding could help to make up for budget losses that stem from shutting down large portions of the economy.

We will continue to look for any possible cost savings and reimbursement opportunities on the State and Federal levels as 2020 continues.

But one of our greatest concerns is how New York State’s Budget will impact Rockland and counties across the state. The approved State Budget contains a provision granting the State Budget Director broad authority to unilaterally reduce reimbursements (up to 15%) to local governments based on available state revenue, reported monthly.

According to the official language, if the State’s Financial Plan is out of balance by more than one percent (about $1 billion) during any measurement period, the budget director can adjust all appropriations, including capital and operating aid.

For counties, this means the New York State will make cuts across the board, including reimbursement to counties for the range of programs we fund and provide at the local level, if revenues fall below this threshold.

Here in Rockland, we had budgeted for $82 million in State Aid across all our Departments. With one full quarter behind us, we face the possibility of $9 million in reduced reimbursement revenue. This action alone would send our 2020 Budget into deficit.

It is incredibly unfair, and frankly reckless for NYS to give themselves the ability to balance their budget while throwing local governments all across NY under the bus and into deficit, further burdening local taxpayers. It penalizes counties and specifically Rockland, which has been extremely frugal in rebuilding our surplus, while NYS (before this pandemic even began) had been burning through their surplus during the last few decade of unprecedented economic growth. That’s fiscal mismanagement at it’s absolute worst.

This crisis has had an incredible impact on our lives and finances. We have lost those we love and are collectively experiencing a life changing trauma. But I want to reassure each of you that we will get through this. We have faced adversity before and just as we have in the past we will overcome these challenges and emerge stronger than ever before.

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