KINGSTON – In November, Ulster County legislators approved the 2010 budget proposed by County Executive Mike Hein. The budget, in effect since January 1, includes a 3.49 percent tax increase, layoffs for 30 government employees, and the elimination of two county-run programs.

Despite what appears to be a bare-bones budget, at least one legislator claims that the executive's budget overstates sales tax revenue and will result in a shortfall.

Newly minted county legislator Terry Bernardo (R-Accord) feels that Hein's sales tax projections are unrealistic. She said that, before approving the 2010 budget, legislators "should have heeded the leading economic indicators telling us that sales tax revenues are not going to increase above 2009 levels."

Citing the county's rising unemployment rate, which hit 8.3 percent in 2009, the job growth decline statewide, and the slow recovery of the Dow Jones, Bernardo feels that it was fiscally irresponsible to project a sales tax increase in the budget.

The 2010 budget anticipates receiving $79.5 million in sales tax revenues, a growth rate of 2.3 percent above the $77.7 million collected in 2009. Last year's revenues were budgeted at $85 million, and the shortfall resulted in a $7.8 million deficit at year's end. Bernardo said that given the struggling economy, "it's hard to conclude that we should increase our projected sales tax revenues by $2.5 million in 2010."

"We'll be lucky to keep sales tax revenue flat to 2009 and we should be prudent in our budgeting," she said.

A local business owner — she co-owns a Pilates studio and a roller-skating rink/skateboard park with her husband, Len — Bernardo said that after poring over the numbers from the last decade of sales tax projections to actualizations, she discovered that the sales tax has only met the projections four of those ten years.

Former legislative chairman David Donaldson (D-Kingston) said that projecting sales tax revenue "is always a gamble," but that he feels comfortable with the budget director's anticipation of a "conservative increase."

County budget director Art Smith said that the 2010 projection "takes us back to 2004 sales tax revenues."

Bernardo, who chairs the legislature's newly formed Government Operations and Efficiency committee, said she feels the sales tax revenue needs to be closely watched this year, and legislators shouldn't dismiss the possibility of mid-year budget cuts.

In 2009, the sales tax deficit was $7.8 million, which, Bernardo said, forced leaders to draw deeply from the county's general fund balance. The 2010 budget analysis, prepared by consulting firm O'Connor, Davies, Munns & Dobbins, notes that this year's budget relies on the fund balance by $5.4 million more than the 2009 budget.

Donaldson said the fund balance was designed as a "rainy day fund," and that budget leaders didn't want to impose a higher tax increase on taxpayers under trying economic times. He added that during the budget process, when legislators had the power to amend, nobody came forward with these recommendations.

Following the budget vote in November, Donaldson publicly voiced his disgust at what he believes was political gamesmanship on the part of the Republicans, who voted unanimously to adopt the 2010 budget as proposed by Hein.

Donaldson said the budget committee had worked tirelessly on amendments to the county executive's budget that included restoring funds to social programs like the county's home nursing and long-term care programs. "It costs $125,000 a year to place a troubled kid into a juvenile facility – why cut the $5,000 CASAC counseling program that could prevent placement altogether?"

In the end, the budget passed without amendment.