The Otsego County Board of Representatives met for its first 2021 budget session Thursday, Sept. 10, but the questions outpaced the answers.
How will the county close a projected $13 million budget gap? Will Otsego’s 2021 revenue decrease by the New York State Association of Counties’ low projection of $2.6 million, or by the high-end estimate of $8.3 million? Can the county keep its low property tax rate? How many services can be cut before residents are upset? Can the county write off a $2 million debt it owes its fund balance from the highway department?
Otsego County Treasurer Allen Ruffles met with the Board on Thursday in a meeting held via Zoom and broadcast on Facebook live, because of the coronavirus pandemic.
“I feel that it has been a very comprehensive Day One for us,” Board Vice Chair Meg Kennedy, C-Hartwick, Milford, New Lisbon, said.
Board Chair Dave Bliss, R-Cherry Valley, Middlefield, Roseboom, said he thinks it will be crucial for department heads and their parent committees to rework their budgets in September meetings.
Ruffles said the board has few choices.
“There’s not going to be any win-win here to close this gap,” he said.
“We’re trying to develop efficiencies here, but no matter what efficiencies we develop, we are not going to close a $13 million gap,” he said. “You can decrease services ... and there’s going to be people angry about services.
“The only revenue we control there is property tax,” he said. “You can increase that, but that’s going to make people angry as well.”
The pandemic and the economic fallout from it have crippled the county’s budget, with a loss of sales tax revenue projected at $3.4 million, a loss of bed tax revenue projected at more than $1 million and a 20% loss of state revenue still looming.
Ruffles said the state losses are projected at $3.4 million.
The county’s fund balance is relatively healthy at $15.3 million, but a lot of that is in money owed rather than liquid, and some of it is based on projected state reimbursements.
“I have my doubts we’re going to get that money back,” Ruffles said.
Last year’s budget gap was filled in part by more than $5 million from the county’s fund balances, but that option is not going to be available this year, he said.
Kennedy asked if the county could prioritize spending by only paying for mandated services, but Ruffles said that idea is tricky. For instance, he said: the solid waste program is not mandated, but it is mostly self-sufficient; building services are not mandated, but keeping county property maintained is necessary.
“There’s going to have to be some tough discussions made at the parent committees,” Ruffles said.
To deal with the 2020 shortfall, the county laid off about 60 workers, cut department budgets across the board by about 15%, cut contracts with outside vendors by about 15%, canceled several major projects and instituted hiring and spending freezes.
Ruffles said he does not have the stomach for another round of layoffs.
“That was awful,” he said. “That is not something I would ever want to go through again.”
The board will tentatively hold its next budget meeting at 1 p.m. Thursday, Oct. 1.
Greg Klein, staff writer, can be reached at email@example.com or 607-441-7218.