On a bright spring day this year, with great fanfare, the county executive went before the CountyLegislature's Ways and Means Committee and proclaimed: "We ended 2004 with a budget surplus of $2.4 million." Great news, if it were true.
The problem is that the very next day the county's auditors certified financial statements showing that the county's General Fund had a deficit at the end of 2004 of $19,526,000 and suffered a decrease in total assets in 2004 of $62,542,000.
The CountyLegislature's Republican majority proclaimed that the 2005 budget was balanced and voted to adopt it. In May of this year the county's budget director forecast that the budget would result in a deficit of up to $13.8 million.
By late summer, the budget director announced that this year's budget would result in a shortfall of up to $21.8 million. Then, just before Labor Day, the Democrat and Chronicle reported that the county had an "estimated $40 million budget deficit this year". With fall soon turning into winter, I can only hope that the bad deficit news doesn't continue to pile up as fast as the approaching snow.
What is the solution to this financial storm?
Honest budgeting would be a start.
For years the county administration has continually used financial gimmicks to temporarily paper over deficits, but it never solves the problem. Most of these gimmicks actually make the problem worse by increasing future costs to property taxpayers.
One year, county officials sold a cost-saving power plant, and now they purchase utilities from the company they sold the plant to with an exclusive contract. The next year they sold the Civic Center Parking Garage --- and we saw parking rates double.
Then they sold the county-owned Iola office complex, which housed many county services, and now we pay rent to loyal Republican contributors to lease office space for county employees.
The county redirected $35.9 million that was supposed to pay for the new jail and used it for general operating expenses --- then borrowed the money for the jail. Our children will be paying for the jail that Tobacco Settlement money was supposed to pay for.
This year, the county's budget gimmick is to borrow an additional $51 million against the future collection of those Tobacco Settlement funds.
Another example: In the 2005 budget, it was assumed that the average state welfare-program caseload would be 10 percent less than in 2003 and that the cost of this program would drop 16 percent from the 2003 level. Anyone familiar with the social-service system knows that caseloads in this program are rising. People are being thrown off the federal welfare program because of the five-year cap on eligibility, and they are moving to the state program. So now, surprise, surprise: there is a multi-million dollar budget overrun in the program.
On a smaller scale, consider Frontier Field. The 2005 budget (and every budget since Frontier Field was built) shows the rent from tenants at Frontier Field equaling the county's costs. The problem is that the rent received never equals the costs. In 2003 (the last year for which data is available), the county didn't collect a single dollar from the tenants. From the time Frontier Field opened until 2003, the deficits caused by unrealistic revenue budgeting have totaled $10.6 million. But that fact was never announced.
Then there is the Republican's favorite whipping boy, Medicaid. Every problem imaginable is due to Medicaid. The county is correct when it says that the cost of the Medicaid program has increased substantially. But the county never tells us that the cost of other social-service programs has decreased substantially. That decrease almost equals the increase in the cost of Medicaid.
In fact, in the 10 years ending December 31, 2004, the average annual increase in the cost of all health and welfare programs (including Medicaid) has been 1.1 percent. That increase is less than half the rate of inflation. But that fact is never disclosed.
What expenses have increased? Rent expense increased by 225 percent from 1994 (an average of 20 percent per year). Total public-safety expenses increased 79.9 percent in the 10 years ending last December. That's an average of 8 percent per year --- more than double the rate of inflation.
The county has a serious budget problem that must be solved. But we won't find the solution until we illuminate the facts --- all the facts. Once we openly and honestly lay all the facts on the table, the community can begin an intelligent discussion of solutions.
Democrat Paul Haney served on the RochesterCity Council and is a former county finance director. He is running for CountyLegislature in the 23 legislative district, which includes part of the southeastern portion of the city.