It appears inevitable that Rockland County will borrow against its share of a national tobacco settlement to get out of financial trouble.

Although Legislator Kenneth Zebrowski, D-New City, had been an opponent of using the money to plug a budget shortfall, he is now conceding that the county has few other options. The county has a $44 million shortfall heading into 2002. "This is a difficult choice to make," said Zebrowski, chairman of the Legislature's Budget and Finance Committee. "We need it to get us out of this budget hole we are in." Last week, the rest of the Legislature agreed with Zebrowski and voted to hold a public hearing on the issue on Dec. 4. As part of the 1998 national settlement with tobacco companies, Rockland County is expected to receive about $5 million a year for at least the next 25 years. But, if the county borrows against the settlement — a process known as securitization — it could add an extra $8.6 million to the budget for next year, County Executive C. Scott Vanderhoef has said. Getting more money now, however, comes at a price. Future generations would get much less money than if the settlement were left alone. In a scenario proposed by Vanderhoef, the county would get less than $1 million a year from 2005 to 2015, instead of the annual $5 million. Under that scenario, the county would collect more than $15 million in the next three years. Exactly how a deal would be structured would be determined later. Vanderhoef said the county would use the money to pay off past debts, which would free up money in the operating budget. Vanderhoef has been advocating securitization since the summer, when he first asked the Legislature to hold a public hearing on the topic. Lawmakers refused that request repeatedly. Some said they did not know specifically how Vanderhoef intended to use the money if it were securitized. Legislator Ellen Jaffee, D-Suffern, was one of the lawmakers who opposed the idea then but now is reluctantly going along with it. "The reality is that given the financial position we are in, we are really left with no other alternative," Jaffee said. Last week, lawmakers learned that what they thought was a $35 million budget shortfall, had grown to $44 million since Oct. 23. That is the day when Vanderhoef released a proposed budget for 2002. The shortfall has been created by slowing sales tax collections, growing expenses for state-mandated programs and a dwindling reserve fund. Now, Vanderhoef is asking the Legislature to raise the sales tax from 7.25 percent to 7.75 percent, increase property taxes by 4.9 percent, create a new mortgage filing tax and do securitization. He has also asked the Legislature to abolish 89 unfilled jobs. But even with all of those steps, the county Legislature still must find an additional $9 million to balance the budget, Zebrowski said. He said the Legislature will make dramatic cuts to the budget to prevent an additional tax increase on top of the one's Vanderhoef has proposed. When the Legislature releases a budget of its own next week, Zebrowski predicted, there will be $10 million worth of cuts in the plan Vanderhoef proposed in October. If the county doesn't securitize, Legislature Chairman Ilan Schoenberger, D-Wesley Hills, said, the panel would have to find even more to cut. "If the Legislature doesn't go along with it, we will have another $8 million to $9 million gap to cover," Schoenberger said. Minority Leader Frank Fornario, R-Blauvelt, has supported securitization since Vanderhoef first proposed it. He said the tobacco settlement was meant to pay counties back for the Medicaid expenses they incurred over the years, which have most affected current taxpayers. He said present taxpayers should get more of the benefits than future taxpayers, which they would under the securitization plans being discussed. Although Democrats on the Legislature are now going along with securitization, it doesn't mean they are accepting Vanderhoef's plan. Jaffee said the Legislature would set aside at least 20 percent of the money from securitization for health care, including tobacco cessation programs. Also, lawmakers would demand that health-related debts be the first to go. Jaffee said one of her initial fears about securitization was that there would be no money to fight tobacco use. She said the Legislature's plan would make sure anti-smoking programs would get money. Legislature Majority Leader Ryan Karben, D-New Hempstead, said he is still against securitization but will go along with the plan because there are few other ways to generate the money needed to close the $44 million shortfall. "I don't know where else the money will come from," Karben said. The Legislature will vote on a budget for 2002 and the securitization plan at the same Dec. 4 meeting.

<< Prev	CIGoutlet.NET News Home	Next >>