CATSKILL — Facing projected state aid cuts of 20%, the county will be pulling $2.5 million out of its reserves.
The tentative 2021 Greene County budget will remain relatively flat, with a slight increase of about $500,000, to $112.6 million. The amount to be generated by taxes will remain at the 2020 level of $27.4 million, with nine of the county’s 14 towns seeing tax rate reductions, according to the budget proposal.
Projected revenues for 2021 are down from about $81,000 to $78,500, which reflects the anticipated state aid cut.
“The governor says he will continue the 20% cut for two years,” Greene County Administrator Shaun Groden said. “I’m not sure if I can believe that or not, but when he restores that money back, I would not need to get into the reserve fund. My budget would be whole again.”
The reserve fund was created after the Great Recession in 2008, when the county lost about $3 million and did not have a reserve, Groden said.
“Sales tax is becoming more and more important because it’s the single biggest revenue we have,” he said. “It’s driven by the economy and in anticipation that it would one day falter, we set up the reserve fund.”
The county will access $2.5 million from the reserve, which has accumulated to $7.5 million over the years, Groden said.
Sales tax, the county’s top revenue followed by the tax levy, is projected to increase by $500,000 in 2021 to $32.7 million.
“I was terrified of sales tax when the COVID first hit,” Groden said.
Sales-tax revenue in 2020 is about 3% higher than this time last year, Groden said. The county has collected about $27.5 million so far this year of the $32.2 million projected for 2020.
“We’ll meet the budget, we’ll be OK,” Groden said. “The fact that I can say that through the heart of the pandemic shutdown makes me think next year, we will get back to some normalcy. Compared to where I was at in April, I’m ecstatic.”
Internet sales have gone from being ranked 15th in sales tax contributors to fourth, Groden said.
“The phenomenon for sales tax is that the mall may have been closed but people are still buying their sneakers; they’re just doing it online,” Groden said.
Because of a law change in June 2019, internet sales tax is collected in the location that the item is shipped to, not where it is shipped from, Groden said.
“People are changing the way they shop, they’re changing the medium by which they shop, but they are still shopping,” he said.
The budget is relatively flat, Groden said, with some new expenses related to the county jail added.
“The expenses from the new jail are in next year’s budget,” Groden said. “We’re planning on rehiring COs (corrections officers) that either retired or traded out when we closed. The new debt service is in the budget, the utilities are slightly adjusted.”
At the end of the year, the county will have $49.5 million of debt, with $38 million coming from the new Greene County Jail project.
The 64-bed facility, expected to open in July 2021, is funded by a $39 million bond from Robert W. Baird & Co. Inc. at 2.49% interest and an $8.1 million contribution from the county.
The ongoing pandemic has made the budget process for 2021 different from other years, Finance Committee Chairman Charles Martinez, R-Coxsackie, said.
“In March of this year, our national, regional and local economies were running at historic highs,” Martinez said. “Unemployment rates were at historical lows. And then the COVID pandemic hit. Within weeks our economy flipped.”
In April, the county’s unemployment rate went from its pre-COVID level of 5% to 14.8%, as many businesses closed their doors.
“As our budget cycle commenced, it became apparent that this crisis would not pass quickly,” Martinez said. “Therefore, the consensus of discussions focused on one simple goal: Our next budget could not raise property taxes.”
Nine towns — Athens, Coxsackie, Greenville, Halcott, Jewett, Lexington, New Baltimore, Prattsville and Windham — will see a slight decrease in property taxes, Martinez said.
Eight towns saw decreases for 2020.
The county Legislature implemented a hiring freeze and halted discretionary spending, Martinez said.
“The hiring freeze is primarily intact,” Groden said. “We probably lost 15 to 18 full-time positions across the board [due to retirement].”
The county has not had any layoffs or furloughed any employees, he added.
Discretionary spending included items such as travel, conferences, subscriptions, paper products, heating costs and overtime.
“Some things can’t change,” Groden said. “Health care is not in my control, the debt service is fixed.”
A public hearing on the proposed 2021 budget will be held Nov. 2 at 6 p.m. at the Catskill High School auditorium.