Tompkins County Administrator Lisa Holmes gave a presentation to the Legislature on the data and considerations that will inform the 2023 Tompkins County budget.
Holmes began her presentation by detailing economic and fiscal indicators including local and national data. Unemployment rates in Tompkins County continue to be low (reported at 3 percent locally versus 5.1 percent statewide in February of 2022), whereas inflation has risen significantly, and consumer confidence has decreased slightly.
Holmes opined that we are in a time of unknowns on how national data trends will shift over the calendar year leading into further budget preparation. Holmes detailed local indicators of need including that households participating in the Supplemental Nutrition Assistance Program (SNAP) have decreased overall over the past decade though are up slightly in 2022. Other indicators of need presented were Temporary Assistance to Needy Families (TANF Federal Block Grants providing cash assistance to families) and Safety Net cases, both of which also continued to decline over the past decade.
Holmes also gave an update on sales tax, which is the second largest source of revenue for Tompkins County behind property taxes. Tompkins County sales tax numbers declined the most in any New York State county in 2020 as the pandemic hit, though sales tax receipts have rebounded strongly. So far in 2022 sales tax receipts have been above all previous years, though this continues to be a number that is difficult to accurately predict. Holmes also shared that nearly $700,000 that had previously been annually usurped by the State for aid to municipalities and a distressed hospital fund will be reinstated to Tompkins County in 2023.
Additional context detailed included that the rate that the County pays for assigned counsel fees may increase significantly and become an unfunded mandate cost passed on to the locality (possibly a $1.8 million increase). Holmes also indicated that the County has not yet received $3.5 million owed by New York State from Medicaid Reconciliations nor indication of when the $1.2-2.3 million owed for 2020-2022 would be paid out. Holmes shared a major note of caution for the legislature to be aware of related to national trends in air service due to COVID affecting the Ithaca Tompkins International Airport resulting in lower enplanements and pending payments for debt service on the terminal expansion project. Holmes offered that these needs would be addressed as more detail shapes up for the 2023 budget.
A key consideration for forecasting future costs include that the County will embark on an organization-wide compensation study and market analysis in 2022 with future salary adjustments to be made over time depending on the results of the study and analysis.
Major budget drivers outlined by Holmes impacting the growth in local dollars needed to maintain efforts at the County included:
•wage growth estimated at $5.5 million for 2023 due in-part to negotiated salary increases with bargaining units (does not take into account the impending compensation study),
•capital contributions estimated at $1 million, a 1.93 percent increase of the annual levy to support infrastructure investments,
•increasing the contingency fund to account for changes in rollover policy,
•increasing the County’s self-insurance reserve by $100,000,
•expected nearly $5 million in sales tax receipts, even with conservative estimates, as well as an additional $625,000 increase in expected casino revenue,
•accounting for the use of $1.6 million in fund balance to balance the 2022 budget and planning to use none to support the 2023 budget,
The total anticipated levy impact of a maintenance of effort budget would total $350,000, or around a 0.67 percent tax levy increase.
Holmes further detailed items that may be considered beyond a maintenance of effort budget, including:
•restoration of departmental cuts from 2021 due to pandemic impacts, including trainings, social services program contracts,
•anticipated increases in vehicle fuel costs,
•growth for the support of sponsored agencies (not for profit organizations that receive financial support from the County), estimated at 3 percent or $205,000,
The total anticipated levy impact of the beyond maintenance of effort costs equal $632,000 or around an additional 1.21 percent tax levy increase. This does not include any anticipated need to temporarily support the Ithaca Tompkins International Airport in 2023 with departmental and general fund balances.
Holmes outlined several scenarios and how various budget target levels would impact a homeowner with the median home value of $226,000. The estimated maintenance of effort would result in an increase of $64 in property taxes for the median homeowner, whereas the estimated beyond maintenance of effort budget would result in an $80 increase.
Legislators began discussions on the factors presented by Administrator Holmes. Discussions included impacts from employee wages and the anticipated impacts from the compensation study and expectations to support the Airport amidst challenges.
The 2023 budget does not include information on the impending Community Recovery Fund, as that $6.53 million is being leveraged from existing fund balance.
Legislator Deborah Dawson (D-Lansing) who chairs the Budget, Capital, and Personnel committee thanked Lisa Holmes, “This was an excellent, comprehensive, and thoughtful presentation. It’s hard to know where we really are, and we have to make estimates with unpredictability. We’re setting a target fully cognizant that things may change by the fall.” Dawson added that at a special committee meeting before the next meeting of the full Legislature a resolution will be considered on the target tax levy increase. Legislators Dawson and Amanda Champion (D-Ithaca) advocated for a 1.88 percent levy increase target reflecting the beyond maintenance of effort budget detailed by Holmes, with Legislators Dan Klein (D-Danby) Veronica Pillar (D-Ithaca), and Mike Lane (D-Dryden) inquired as to whether it should be higher with other outstanding variables. The target will be a planning tool used by the County Administrator as she plans the 2023 budget.
Legislator Lee Shurtleff (R-Groton) spoke about his interactions with people in his district and the “record sales tax and with the fund balance we have,” – outlining that as people feel costs go up the County should be sensitive about impacts on families and residents. Legislator Pillar refuted that it’s the County’s role to support and provide resources to impact people’s lives, which they plan to keep in mind as they study the budget.
Legislators settled on planning for a 1.88 percent target increase following a straw poll. This number will inform the County Administrator’s further budget planning throughout the year and will be reflected in a draft resolution presented to the Budget, Capital, and Personnel Committee.