Published: October 24, 2009 12:00 am      

Otsego faces budget crunch

By Tom Grace
Cooperstown News Bureau

At the conclusion of Otsego County’s full-board budget workshop sessions, the 2010 tentative budget called for a tax-levy increase of about 30 percent.

The board is not done working on the budget. County Board Chairman James Powers said Friday that the final budget will raise taxes far less.

Powers said that he, the county’s Administration Committee, and Treasurer Myrna Thayne would meet soon to go over the numbers.

``We want to see exactly where we stand and take it from there,’’ he said. ``I can tell you this: we’re not going end up with a large tax increase.’’

Powers said he believes the county board can whittle down expenses to an acceptable level without laying off employees.

``That’s something I don’t want to do to our people, especially in a recession,’’ he said.

``We have very good county workers.’’

To try to keep expenses in check, the county board Wednesday instituted a hiring freeze. The board also opted not to give department heads a raise next year, a move that Powers opposed.

``I think this is unfair to some of our best workers,’’ he said.

Rep. Stephen Fournier, R-Milford, said he, too, opposes belt-tightening at the expense of managerial employees.

``I worry that we could lose some key individuals,’’ he said. However, Rep. James Johnson, R-Otsego, chairman of the county’s Administration Committee, said the board faces stark choices this year as salestax revenue has declined about 8 percent, or roughly $3 million.

``I think it comes down to pavement or payroll,’’ Johnson said. ``Do we want the county to continue to deliver essential services, or do we want to have a jobs program?’’

Johnson said he proposed that all county departments with more than 9 employees come up with a plan to reduce their workforces by 10 percent.

``The board doesn’t seem ready for that, but I don’t see any way we can balance this budget without reducing our workforce,’’ he said.

A proposed new contract between the county and CSEA, calling for increases of about 3 percent a year, is going to drive up labor costs by millions of dollars.

``At the same time, the state is telling us we have to contribute 15 percent more into the retirement system,’’ Johnson said.

``We’re being hammered on all sides.’’

Rep. Donald Lindberg, R-Worcester, chairman of the Otsego Manor Committee, said he essentially agrees with Johnson.

``I don’t think we can cut every department, but we have to cut some of them,’’ he said Friday.

``I also think we have to look at what we’re paying outside agencies like Soil and Water and Cooperative Extension, and maybe it’s time the board and M&C (managerial and confidential) employees paid more for their health insurance.’’

The county’s managerial employees pay 5 percent of their premiums, compared to the 20 percent paid by CSEA workers.

Lindberg, who voted against the 2009 budget, said his peers should have known they were overestimating revenue for this year.

``Now we’re short this year at the same time we’re trying to get ready for next year,’’ he said. ``It’s a mess.’’

Earlier, Lindberg said he hoped the county could transfer up to $3 million from the nursing home’s budget to the county budget. He said Friday this no longer seems possible.

``I’m told the state is taking another $1 million for Medicaid, and the new contract is going to drive up the Manor’s labor costs by $700,000,’’ Lindberg said.

In future years, labor costs for a host of county departments will continue to rise under the proposed contract, he said.

``If we don’t cut our workforce, I don’t think it’s too much of stretch to say that eventually we could bankrupt the county,’’ he said.

For years, Otsego County has relied on sales tax to generate most of its revenue, but the outlook for next year is uncertain.

Powers said he believes the economy will rebound on consumer demand.

``I don’t think people are going to go back to washing their clothes in the creek,” he said.

Johnson said he believes 2010 may be ever tougher than 2009.