THE COUNTY BEAT

How Did $5 Million Boon

Become $9 Million Gap?

Treasurer Explains County’s Changing Fortunes

By DON MATHISEN • for AllOTSEGO.com

COOPERSTOWN – How did Otsego County go from a prospective $5 million surplus with last year’s sale of Otsego Manor to a $9 million budget gap?

The question is being raised as county representatives prepare the 2016 budget.

According to County Treasurer Dan Crowell, the surplus never materialized.

It evaporated when Otsego Manor legacy costs proved to be $1.8 million, sales-tax collections declined because of cheaper gas prices and an increase in online sales, and the cost of the emergency tower communication system currently being built was factored in.

Then when department heads submitted their wish lists for the 2016 budget, the county was facing a $9.2 million gap – Manor legacy cost, continuing sales-tax shortfalls, and the towers driving the gap.

That shortfall is being addressed now.

The budget review committee chipped away $2.2 million of the shortfall by proposing to finance the tower project, instead of paying the full cost in the coming year.

$2 million in reductions have already been made to department requests.

And the Board of Representatives has ordered managers to slam on the brakes when it comes to purchasing and hiring.

So far, the new proposed cuts bring the original $9.2 million gap down to a current shortfall of $4.7 million.

Crowell said more cuts are coming to projects and programs. He is not anticipating layoffs; any staff reductions will be through attrition.

The biggest question remaining, according to Crowell, is how much money can be cut from the Department of Social Services and still meet state mandates to aid needy children, families, and individuals.

“I use the term challenge rather than crisis,” said Crowell.  “In a crisis there is a higher level of uncertainty of a successful outcome.”

Crowell will submit the executive budget in mid November to the Board.

The Reps then consider changes and modifications and hold a public hearing.

Crowell is confident the Board of Reps will pass a 2016 spending plan with a reasonable tax levy by the mid December deadline.

The impact on services will be minimized to the extent possible, given the county’s fiscal situation, according to Crowell.

Under state law, the county must have a balanced budget in place at the start of the new year.