1. Tomorrow’s New York Counties The Path Forward

2. NYSAC | 540 Broadway, Fifth Floor | Albany, New York The Path Forward Tomorrow’s New York Counties The Path Traveled So Far State Imposed Costs Property Tax Freeze Your County Budget

3. NYSAC | 540 Broadway, Fifth Floor | Albany, New York County Fiscal Issues

4. The County Fiscal Gap - 2011 (WHERE WE WERE IN SEPTEMBER 2011) Assumes slow economic growth with property tax receipts capped at levy limit + economic growth factor of.25% Other revenue sources projected at historic trends (2000-2009). All expenditures predicted at historic growth rate (2000-2009). *OSC Data – Compilation and Trending by NYSAC. Values represent aggregates for all non-NYC Counties 2

5. NYSAC | 540 Broadway, Fifth Floor | Albany, New York County Fiscal Condition Since September 2011 actions by county government to reduce costs, combined with State Budget actions to lower the growth in some state mandates has improved the long term budget projections for counties In 2011, counties projected that by 2020, without any change in existing trends, the aggregate fiscal gap facing counties would rise to $6 billion annually. Today, this same analysis shows that the aggregate fiscal gap is expected to drop to about $2.9 billion annually by 2020. 3

6. Assumes slow economic growth with property tax receipts capped at levy limit + economic growth factor of.45% Other revenue sources projected at historic trends (2001-2012). Includes Casino Gaming Revenue All expenditures predicted at historic growth rate (2001-2012). Includes Medicaid hard cap, pension reform *OSC Data – Compilation and Trending by NYSAC. Values represent aggregates for all non-NYC Counties The County Fiscal Gap – 2013 4

7. NYSAC | 540 Broadway, Fifth Floor | Albany, New York Caveats: County Fiscal Condition 5 While the out-year fiscal gap has likely been narrowed, counties’ current fiscal condition, in general, has deteriorated: The revenue impact of the “Great Recession” is not over, it is likely to suppress economic growth and local tax receipts for up to a decade (2008 – 2018) State mandated programs and other fixed government costs continue to rise faster than available revenues The lower level of reserves leaves counties less capable of absorbing any further economic shocks Workforce reductions, program and funding cuts and selling public assets eventually reach a point of diminishing returns and can no longer be used as way to balance county budgets

8. NYSAC | 540 Broadway, Fifth Floor | Albany, New York State/County Actions Impact on the Fiscal Gap 6 Cut out year fiscal gap in half (from $6B to $2.9B) However, projected fiscal gap of $2.9 billion for counties in 2020 is 10 percent of projected revenues for that year – this means a county would have to cut their budget by 10% in 2020 to reach balance Controlling costs and revenues is an ongoing challenge for counties because the State plays a significant role in county government For a typical county, 70- 80 percent of all spending is for state and federal programs, and fixed costs

9. NYSAC | 540 Broadway, Fifth Floor | Albany, New York Reimbursement to Counties for State Programs The State Comptroller reported that from 2001-2011:  Total federal and state aid to municipalities failed to keep pace with inflation  Between 2001 and 2011, state reimbursements to counties dropped from 15.7 percent to 11.6 percent of total county costs, and only due to the influx of federal stimulus funds has the share of federal aid been maintained  With stimulus phased out at the end of 2011 and no new federal funds to fill the gaps, federal aid levels will fall to pre-stimulus levels, or below NYSAC has identified that between 2008 and 2012 State reimbursement to Counties dropped by $350 million annually with no commensurate reduction in state mandated costs during that time period. This is significant. 7 The State Comptroller reported that from 2001-2011: Total federal and state aid to municipalities failed to keep pace with inflation Between 2001 and 2011, state reimbursements to counties dropped from 15.7 percent to 11.6 percent of total county costs, and only due to the influx of federal stimulus funds has the share of federal aid been maintained With stimulus phased out at the end of 2011 and no new federal funds to fill the gaps, federal aid levels will fall to pre-stimulus levels, or below NYSAC has identified that between 2008 and 2012 State reimbursement to Counties dropped by $350 million annually with no commensurate reduction in state mandated costs during that time period. This is significant.

10. NYSAC | 540 Broadway, Fifth Floor | Albany, New York The Cost of State Programs on the Property Tax Levy State imposed costs remain a dilemma for county government. Medicaid alone equals nearly half of a typical counties’ property tax levy. 8

11. NYSAC | 540 Broadway, Fifth Floor | Albany, New York Property Tax Freeze How it Works and What it Means for Your County 10 The State Budget includes a temporary (2014-2016) state financed property tax freeze State rebate checks sent to STAR eligible properties Calculated by the State on a house by house basis School district levy rebates are paid in 2014 and 2015 All other municipal levy rebates are paid in 2015 and 2016 Staying within the tax cap does not guarantee a rebate due to exemptions related to reassessments, changes in STAR eligibility, the $ value of home improvements, etc. The State estimates cumulative rebates over the next 3 years of $1.5 billion

12. NYSAC | 540 Broadway, Fifth Floor | Albany, New York Property Tax Freeze How it Works and What it Means for Your County Conditions necessary for a rebate to be paid – Year Two – stay within tax cap and submit a government efficiency or shared services plan that demonstrates savings equal to 1 percent of the combined property tax levies for those participating in the joint plan Municipalities can submit their own efficiency plans Efficiency plans are due June 1, 2015 to State DOB for evaluation 11 YEAR ONE Municipality must stay within tax cap Rebates are paid even if the levy stays the same or goes down. In these circumstances the rebate equals the allowable tax cap growth for that house for each taxing jurisdiction holding the levy flat or cutting Conditions Necessary for a Rebate to be Paid

13. NYSAC | 540 Broadway, Fifth Floor | Albany, New York Property Tax Freeze How it Works and What it Means for Your County Conditions Necessary for a Rebate to be Paid YEAR TWO Stay within the tax cap and submit a government efficiency or shared services plan that demonstrates savings equal to 1 percent of the combined property tax levies for those participating in the joint plan Municipalities can submit their own efficiency plans Efficiency plans are due June 1, 2015 to State DOB for evaluation

14. NYSAC | 540 Broadway, Fifth Floor | Albany, New York Property Tax Freeze How it Works and What it Means for Your County Budget Director and Governor’s Office have indicated they want forward looking initiatives presented rather than things already accomplished – they believe a reasonable look back is 1 or 2 years tops. The 1 percent in savings must be recurring, in fiscal years 2017, 2018 and 2019 No requirement to reduce the tax levy in these years by 1 percent 12 The law anticipates counties will take the lead in presenting and implementing shared services or government efficiency plans across municipalities Requires the State Budget Director to consider existing shared services or government efficiency plans already in place when evaluating these plans

15. NYSAC | 540 Broadway, Fifth Floor | Albany, New York Property Tax Freeze How it Works and What it Means for Your County o There is nothing in the law that would jeopardize future state reimbursements back to the county/municipality o There is nothing in the law that would require tax payers to return rebates they received in 2016 because the shared services government efficiency savings target were not achieved 13 What does One Percent look like? ONE PERCENT What happens if the savings projected from the efficiency plan do not materialize? These savings have to accrue in 2017/18/19. If all localities join with the county for a shared services project, 1 percent of combined 2014 levies must be saved

16. NYSAC | 540 Broadway, Fifth Floor | Albany, New York County Shared Services Improving Government Efficiency Pursuing the most efficient government operations is part of the solution for lowering the property tax burden and closing the projected out-year budget gap. 15 Closing fiscal gaps and improving the efficiency of county government is an ongoing process. Rethinking how services are provided and sharing resources with other counties, and/or other local government partners, has become standard operating procedure for county leaders.

17. NYSAC | 540 Broadway, Fifth Floor | Albany, New York County Shared Services Improving Government Efficiency Onondaga and Oneida County are sharing Medical Examiner Services. Ulster County repurposed an elementary school as an extension of their community college and offices for all of their health and human services. Genesee and Orleans counties’ are sharing public health services. This initiative is the first of its kind in New York State. Essex County consolidated its offices of Community Development and Planning, Youth Bureau, Stop DWI and Traffic Safety into the Office of Community Resources. 16

18. NYSAC | 540 Broadway, Fifth Floor | Albany, New York Genesee County buys and maintains street signs for all the municipalities within the county except the City of Batavia. Chemung County is consolidating all the highway departments (except for Elmira). Dutchess County shares school resource officers, and they provide a conflict defender program jointly with neighboring Ulster county. County Shared Services Improving Government Efficiency 17

19. NYSAC | 540 Broadway, Fifth Floor | Albany, New York Westchester provides Employee Assistance Programs (EAP’s) to 33 municipalities and neighboring Putnam. Nassau County buys gasoline, diesel, heating oil, motor oil, antifreeze, industrial, medical and propane for its townships, villages, schools, libraries, sanitary districts, community college, water districts and fire academy. Rensselaer County dispatches all fire departments, ambulance squads and police departments for all its municipalities with the exception of the Town of East Greenbush. County Shared Services Improving Government Efficiency 18

20. NYSAC | 540 Broadway, Fifth Floor | Albany, New York County Shared Services Improving Government Efficiency Counties understand the fiscal challenges state leaders are facing – we have to do more with less, and we are. Finally, we must work together to close budget gaps, share services, reduce the cost of programs and services at the local level, and work toward a fundamental realignment of how we fund government services in New York. 19

21. NYSAC | 540 Broadway, Fifth Floor | Albany, New York 20

22. NYSAC | 540 Broadway, Fifth Floor | Albany, New York Serving Counties Since 1925 Represent Educate Advocate Serve Thank You for Viewing This Presentation