Breaking News! More Budget Talk!!!

Dear Nieces and Nephews, your Auntie has been busy and managed to get a copy of an email that was sent out to the legislators regarding the 2015 county budget. The person who wrote this email is one who is more than savvy when it comes to finances and budgets. Take a close look at what Legislator Mike Anagnostakis, our very own οικονομική γκουρού (financial guru) says about "The Budget of Stevie Thunder" (posted in full, verbatim, no alterations, omissions or editing).

Dear Legislative Colleagues:

 

      I want to share with you some thoughts on the 2015 proposed budget by the Executive. After review of the budget, I am troubled by 5 different aspects, or things, within this budget. No matter what side of the issue you are on with Valley View, I would think these items would be a problem if we are trying to do the PROCESS the right way and get a true budget done in Orange County which solves the problems that have been stated this year by some.

 

      First, the Executive has railed against the past Executive and the past Legislators for not having a structural balanced budgets (income equaling expenses) because they used about $40 million per year from general fund surplus, other reserves and “one-shots” in order to balance those past budgets.

      Yet, in this budget, the Executive does the same thing by using $45.8 million in general fund surplus, other reserves and “one-shots” in order to balance this budget. Included in that amount are the $15 million from selling Valley View (to balance the other departments deficits) and $8.4 million of Tobacco reserves (instead of using them for anti-smoking programs). The structural deficit would only be cut by about $10 million, so if we had a budget deficit of $63 million this year, then our deficit will still be $53 million for the start of the following year ( and we would not even own Valley View at that point).

 

      Second, the numbers sated for the savings of $6.8 million for the 149 vacant funded positions which are now eliminated, does not ring true! If you take out from those numbers the 34 vacant positions worth $2.6 million that were within Valley View (which averaged $76,100 per position) which are part of these numbers, you are left with 115 positions with a savings of $4.2 million. That works out to $36,500 per position. Back out from that number, the 20% for state pension, the $20,000 for health insurance, Social Security payments and Workers Comp, and you have a salary of $13,000 per position. That would be UNDER minimum wage levels!!

      In 2012, Blair stated that the average funded unfilled position was budgeted at $90,000 – and since that time Health insurance costs and state pension costs HAVE GONE UP. The numbers in this budget do not ring true for this item.

 

      Third, ALL departments were asked to cut 5% from this years and 10% from next years TOTAL taxation in their budgets. Yet, in the submitted 2015 budget, only a total of $3.7 million of department cuts were included. That works out to ½ of one percent of total county budget ($703.1 million) and about 1% of total incoming county taxation sources.

 

      Fourth, the expenses that will remain after the sale of Valley View (the legacy costs) are NOT stated in any part of line item of this budget. When Executive Diana tried to do part year funding for Valley View, he at least did include $5,023,204 related to legacy costs for the remaining 2/3rds of the year, which would prorate out to a legacy cost of $7,534,806 for a full year. (Page 4 – Diana 2014 recommended budget).

      Yet, this budget does not itemize one penny for the legacy costs for Valley View which will still be in the $5-$7 million range. Not surprising, as LaDues' 2015 budget to run Valley View would be around $5.5 million, and thus it very well may cost taxpayers more yearly to sell the facility than to keep it.

 

      Last, and maybe most troubling, I feel that this budget is an illegal budget on many levels. By charter, we must fund fully all departments within the charter. When Executive Diana, funded Valley View for part of the year, the Onofry landmark court ruling stated, “what the County Executive seeks to do within the confines of the 2013 budget, i.e., to unilaterally close Valley View … constitutes an impermissible violation of the doctrine of separation of powers” (Supreme Court: Judge Onofry, OC Legislature vs. Edward Diana, March 21, 2013 page 29-30).

      Further, we are using a “one-shot” of $15 million from the sale of Valley View. This sale is contingent on may things happening. NYS law does not allow for this kind of a contingent budget item. When the budget is passed one of the following will be true: There may not be 14 votes to sell Valley View; or, if there are 14 votes in a resolution, that resolution may be challenged in court and found illegal; or, even if a Local Law is done with 14 votes, that law will not be in place until AFTER an election occurs, if enough signatures are obtained, and ONLY if the sell Valley View side wins that election, which would be MANY MANY months after the budget needs to be in place.

      In each and every one of those cases, this budget would not be legally balanced and I fear we will find ourselves in another court case.

 

Sincerely,

Mike Anagnostakis

O.C. Legislator

 

Back to the drawing board, Stevie.