Deep divide over status of Suffolk County’s fiscal health

Executive Steve Bellone, Comptroller John Kennedy Jr. offer differing view of what financial future holds

When asked to critically examine Suffolk County’s finances and what lies ahead for residents, our executive branch and accounting officials couldn’t be further divided on their vision of the future. 

Suffolk Comptroller John Kennedy Jr. (R) said out of the $410 million operating note the county sought to sell for 2019 operating funds only half, or $207 million, could be competitively sold in December. Instead, he had to rely on a negotiated agreement with Bank of America to give the funds needed to run the county’s government at an interest rate of 2.35 percent. 

“This has been one of the toughest times we’d had in the market since I’ve taken office,” Kennedy said. 

“We are in some very strenuous times.”

— John Kennedy Jr.

The county comptroller, since 2015, said it was a combination of factors that negatively impacted Suffolk: seeking funding later than normal, stock market uncertainty and, perhaps most importantly, that Moody’s downgrading the county’s bond rating from A3 to Baa1. 

“We are barred from being purchased by many major investment funds,” Kennedy said, citing Fidelity and T. Rowe Price Group won’t invest. “We are in some very strenuous times.” 

Eric Naughton, Suffolk’s budget director, said while the county’s bond rating was dropped the comptroller was “overstating” its impact and meaning. 

“[Moody’s investors] are looking at the past,” he said. “They are not looking at what is happening in the future.” 

Naughton cited how Suffolk Executive Steve Bellone (D) has implemented many structural changes since taking office in 2012 including reducing the county’s workforce by approximately 1,200 employees, closed John J. Foley nursing home in Yaphank that was losing money and creating the Traffic and Parking Violations Agency to bring in additional funds. 

Kennedy countered that from March 2012 to September 2018 Moody’s has downgraded the county’s bond rating by five ranks. 

“We need to change how county government operates,” the comptroller said. 

Suffolk is not likely to see the state takeover of the county’s government like Nassau according to Kennedy, in good part because the county has about half the outstanding debt of neighboring Nassau — a sentiment with which Naughton agreed. 

The comptroller suggested that in order to avoid dire straits, Suffolk officials should move to consolidate by merging county offices with similar functions, encourage shared services among municipalities, reduce its workforce, evaluate and sell off surplus property where possible, like the former Suffolk County Police 6th Precinct building in Coram. 

“Structural changes were needed and these structural changes were adopted.”

— Jason Elan

Jason Elan, a spokesman for Bellone, said the county executive has done just that. Under Bellone, the county treasurer and comptroller positions were merged, as were four departments made into two:  Labor and Consumer Affairs and Economic Development and Planning. Bellone made county employees contribute 15 percent to their health insurance premiums while taking a pay freeze himself, at an estimated savings of more than $300,000. Further, Suffolk’s workforce has been reduced and, according to Naughton, county-operated land and property is being evaluated to see if it can be deemed surplus. 

“Structural changes were needed and these structural changes were adopted,” Bellone’s spokesman said, noting Kennedy voted against or opposed many of the measures. 

What looms ahead for Suffolk is negotiation of a new contract with the Police Benevolent Association. Kennedy said at a current cost of $573 million per year, the police contract is the largest item in the county’s $3.11 billion 2019 budget followed by roughly $451 million for county employee’s health insurance. 

“If we are not focused on actively managing those expenditures in both categories, we might as well shut off the lights and go home,” he said.

In fact, it’s not just the police but all of the county’s employee contracts have expired. Elan said Bellone would not comment on the status of PBA negotiations. 

Rather he said the county’s greatest opportunity lies in furthering its economic development, like the proposed Ronkonkoma Hub and other projects that will bring businesses to the area.

These issues are some that are expected to be addressed by Bellone when he gives his annual State of the County per tradition in May.