Suffolk County government — like governments everywhere — is heading for a financial cliff because of the COVID-19 pandemic.
County Comptroller John M. Kennedy Jr. projects “a shortfall” of $400 to $500 million in county finances this year. Suffolk County government’s 2020 budget is $3.2 billion.
A report by the county’s COVID-19 Fiscal Impact Task Force, assembled by County Executive Steve Bellone, estimates a deficit of $469 to $590 million for this year and a three-year deficit through 2022 of $1.1 to $1.5 billion.
A key issue for Suffolk government is having become increasingly dependent on money from the sales tax to operate. Almost 50% of county finances are now drawn from the sales tax. Sales tax receipts are significantly down because of COVID-19. The most recent figures released by State Comptroller Thomas DiNapoli show a 33.5% decrease in sales tax receipts in Suffolk in May — from $109.7 million last year to $72.9 million. In April, the drop was 26.7%, from $111.4 million last year to $81.6 million.
The problem with depending on the sales tax to run government is that it is unreliable. In good economic times, sales tax receipts are flush. But with economic downturns, sales tax collections suffer a corresponding decline.
In 1965, New York State began a sales tax, initially at 2%. The state share is now 4%. In 1969 the state allowed counties and cities to also have sales taxes. Suffolk’s sales tax started in 1969, also at 2% and now it’s 4.25%. An additional .375% paid in downstate counties, including Suffolk, goes to the MTA. So, the combined sales tax total today in Suffolk is 8.625%.
Suffolk is among the leading counties in the state with high utilization of the sales tax. Before the sales tax, the principal tax base here was the property tax. Elected county officials have described to me how increasing the property tax is politically problematic — residents don’t like opening their tax bill and seeing a large increase. But using the sales tax is less an affront — with relatively small amounts taken little by little.
With the financial havoc caused by COVID-19, “The only effective way to deal with this is for the federal government to step up and do what it is supposed to do in national emergencies and provide relief,” Mr. Bellone told WCBS 880 radio.
The problem with this is that many governments across the United States struck financially by the pandemic are looking to the federal government for relief, too.
Mr. Bellone has put forth two bills before the Suffolk Legislature to raise some money to help with the deficit. One would divert money for three years from the county’s Environmental Programs Trust Fund which includes its Drinking Water Protection Program. Another would take from its Sewer Assessment Stabilization Fund. Both bills have the declaration that “for the county to provide necessary services, decisive action is required to address the shortfall in revenues…pending recovery of the regional economy.”
Comptroller Kennedy describes the county’s Drinking Water Protection Program as “the Mother Teresa of county programs — safeguarding the aquifer on which we depend.” Mr. Kennedy, in an interview, emphasized that the program is highly popular with voters and vital. The Sewer Assessment Stabilization Fund is also important, he said.
Suffolk Legislator Al Krupski (D-Cutchogue) issued a statement critical of taking from the Environmental Programs Trust Fund. Regarding its land preservation component, “The public has long supported taxing themselves for land preservation; they know the benefits of preserving farmland and protecting our productive soils, and preserving them for food production forever,” he said. The move would cause “losing land forever to development, especially now with all of the development pressure on Long Island … Land preservation helps us today and is our real legacy to future generations.”
From the environmental movement, Katie Muether Brown, deputy director of the Long Island Pine Barrens Society, in a letter to Newsday, scored the Bellone move and its impact on the Drinking Water Protection Program. “Long Island has the most contaminated water in the state … Our groundwater quality impacts every one of Suffolk’s 1.5 million residents,” she wrote.
Newsday itself came out strongly against the move in an editorial headed “Hands Off Suffolk’s Environmental Funds.” It stated, “One thing that should not be on the table is the latest attempt by County Executive Steve Bellone’s administration to play hanky-panky with environmental funding … Suffolk’s voters have repeatedly shown their willingness to vote for funding for clean water.”