Pension hike covered?

GUILDERLAND — The Democratic supervisor says he’s created a fair budget for next year, but his Republican foe says it’s a sham to get the supervisor re-elected.

At issue, on the spending side, are the town’s pension contributions, which are expected to jump dramatically in 2011; on the revenue side, the issue is accurately projecting sales tax in a faltering economy.

Guilderland’s annual pension contributions are expected to increase 58 percent overall in 2011, according to projections from the state’s local Employees Retirement System (ERS) and Police and Fire Retirement System (PFRS), which are regulated by the state comptroller. 

For Guilderland, that could mean an extra $600,000 or more in contributions in 2011. The roughly $30 million preliminary budget for 2010 does not reflect the anticipated increase. Republican Councilman Warren Redlich says Democratic Supervisor Kenneth Runion, who is up for re-election, is sweeping the issue under the rug in order to claim no town tax increase before the elections.

At a special budget meeting on Oct. 5, the town’s chief financial advisor, John Marra, said the town would “worry about 2011 when it gets here.”

At a budget workshop on Monday, Oct. 26, Runion maintained that line of thought. Department heads met with town board members during the workshop, and they all agreed that their individual budgets would be able to absorb any increases in retirement contributions — in 2011.

“The money for the retirement comes out of a variety of funds, all of which should be able to handle any increases in contributions when we get to 2011,” Runion told The Enterprise this week. According to the supervisor, the town faced a similar large increase in contributions in 2003, and was able to meet the monetary demands without raising taxes or cutting staff and services.

At the workshop, Runion said he had not seen the projected figures for 2011, to which Redlich replied that the supervisor was blatantly lying. Patricia Engel, the supervisor of the state and local Employees Retirement System, told The Enterprise yesterday that municipalities had been mailed pension contribution projections on Oct. 1.

“It’s not credible that Runion doesn’t know about this pension increase, and it’s not like I haven’t been raising the issue. He knows this is important. He is not giving the public the full information,” Redlich said. Redlich thinks that the town’s budget for 2010 should reflect the increased spending necessary in 2011. He cited the budget drafted in the neighboring town of Bethlehem as an example.

Runion told The Enterprise on Tuesday that the town comptroller may have received the pension contribution projections, but that, as the supervisor, he had not seen them before the budget workshop. Runion said he is proud of the fact that he has hardly raised taxes in his 10 years in office, and that, even if the pension contributions did increase in 2011, he does not believe the town taxes would increase.

At the end of the budget workshop, after the department heads had presented their respective budgets to the board, and left the meeting, Runion announced that, if necessary, he was prepared to hold $300,000 of budgeted money, for a cushion.

Redlich expressed concern over that $300,000. He said that should have been accounted for in the tentative budget, before the board approved it as a preliminary budget.

“He’s got cuts to people’s departments that they don’t even know about,” said Redlich, referencing the fact that Runion did not bring up the $300,000 while the department heads were in the room.

“Redlich would like us to budget what we will owe two years from now. We’ve never done that,” the supervisor told The Enterprise. The comptroller’s estimates show that the ERS contributions could go from $614,984, in 2010, to $1,086,129 in 2011. The PFRS could jump from $471,056 to $634,257.

Sales tax debate

Redlich is also concerned that Runion may have overestimated the county sales-tax revenues for 2009, and is doing the same in the preliminary 2010 budget. Runion budgeted for $10.05 million in sales-tax revenues in both 2009 and 2010. Redlich said Guilderland will be lucky to receive $9.6 million in 2009.

The bulk of municipal budgets are funded through county sales tax, distributed according to population.

Runion said he estimated sales-tax revenue using the numbers from 2007, rather than 2008, because revenues were unusually high in 2008.

“The first two quarters of 2009 came in very close to the first two quarters of 2007. What Mr. Redlich just doesn’t want to accept is that we are using the 2007 numbers,” Runion said. He said the budgeted revenues are 4 to 5 percent below the revenues of 2008.

Sales-tax revenue reports from Michael Conners, the Albany County Comptroller, show that the revenues for the first quarter of 2009 were a bit lower than expected, while the second quarter revenues were higher than anticipated. The numbers for the third quarter were low. Redlich is concerned that, if the fourth quarter is as flat as the third, the town could have trouble balancing the budget.

“If the fourth quarter is as flat as the third, we could be off, but I don’t have a crystal ball,” said Runion. “Nobody knows how this economy is going to perform.” He reiterated that Guilderland’s sales-tax revenue estimates were based off of 2007, and the county’s were based off of 2008.

The budget, although based on an anticipated $10.05 million in sales-tax revenues, could balance on $9.7 million if necessary, said Runion. He cited the $300,000 in the budget he could hold.

“As we have done in 2009, and, as part of the review process, I have been looking at areas where we can possibly hold off on spending until we are sure sales-tax revenues won’t cause issues,” Runion said. He cited vacant positions that the town could leave open, equipment purchases that could be delayed, and reserve money as the potential sources of the extra money.

“I’m not talking about modifying the budget at all; I’m talking about holding certain items until we are assured the revenues are all in,” said Runion. He added that the budget had over-projected on health insurance and workers compensation, which will also result in savings.

“We receive our money in increments throughout the course of the year, so that requires us to monitor our budget very closely. It’s an honest budget, and it’s a fair budget,” Runion said.

Redlich disagrees. “The preliminary budget is a sham budget. The supervisor has a real budget in his pocket that he’s going to reveal on Nov. 5.,” he said.