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As budgets keep getting tighter, St. Lawrence County officials hoping pension costs may soon go down

Posted 5/26/13

By CRAIG FREILICH Rising costs of pensions, health care and state mandates continue to plague St. Lawrence County government as officials deal with the effects of curtailed revenues in a weak …

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As budgets keep getting tighter, St. Lawrence County officials hoping pension costs may soon go down

Posted

By CRAIG FREILICH

Rising costs of pensions, health care and state mandates continue to plague St. Lawrence County government as officials deal with the effects of curtailed revenues in a weak economy.

As a result, about 150 county jobs have been cut in recent years, fewer road and bridge repairs are being taken care of and the state has cut much of its funding for probation officers and other mandated programs, according to St. Lawrence County Treasurer Kevin Felt.

Medical insurance and medical care continue to extract an outsized share of the nation’s total economic output, and it is felt by everyone, including county government, which aims to keep its workers covered.

Meanwhile, a diminishing willingness on the part of state government to collect and distribute enough in taxes to pay for what they demand of local government and schools is crushing some communities.

But the cost of keeping the employee pension fund full could be going down in the next few years, according to the Office of the State Comptroller, which oversees the fund.

That ray of hope is lighting one spot in Felt’s gallery of most unwanted impediments to keeping the county’s books in line.

In the meantime, Felt said, staff have been laid off and more positions are left unfilled, some programs have been shut down or sharply curtailed, and infrastructure maintenance has been scaled back.

“We’re down 150 people in about three years, mostly through attrition,” Felt said. “My department lost staff. The Highway Department has taken drastic cuts to their budget for repairing roads and bridges.”

Cuts in state aid have taken their toll.

“Take Probation, for instance. Not long ago, the state funded it 80/20. Now it’s completely reversed. The state used to pay the lion’s share, and now next to nothing.”

Felt cites a “nine for 90” rule that has made its way into the discussion, “where about nine programs in the county budget represent about 90 percent of the total, all mandated by the state,” such as Medicaid. That leaves 10 percent of the budget to cover everything else, and when they have to, “we cut where we can.”

“Health insurance continues to climb,” Felt said. “One thing the county has done to combat this is charge more premiums to employees for their share.

“Where it goes from here is hard to tell. Costs fluctuate quite a bit because we’re self-insured,” Felt said. One big health claim, he said, can result in a big jump in premiums.

In general terms, the same phenomenon – the stock market and real estate crashes and evaporating value in hedges against loss that Wall Street indulged in – has resulted over the last five or six years in lower revenues from income and sales taxes that pay for government, shrinking pension funds, layoffs and business closures. Budgets for county government, school districts, towns and villages, all have shrunk in response.

One place to draw from in tough times is the “rainy day” fund, the fund balance that most governments maintain, but according to a recent audit by the comptroller’s office, the county has dipped too deeply into that reserve. Felt said last winter that he was uncomfortable with how low the county’s reserves were, particularly with a large pension payment coming up that he didn’t think he could cover without borrowing.

But some people see the economy and value of investments recovering enough that the government financial picture could be improving soon.

Felt would welcome that, especially when he looks at how much the pension system has needed to stay afloat.

The bill started rising in 2008, Felt said, when the county’s pension bill was $3 million. “It’s been rising at a million, a million and half a year” since then, he said.

But the Comptroller’s Office, which oversees the pension fund, is telling local government treasurers that it looks as though the fund will not need increasing payments within a year or two and that they should actually decrease.

And if the improving economy has the desired effect in the North Country, the county’s sales tax revenues should rise, even without an increase in the tax rate, which the county is seeking.