Beyond Greed: Saratoga County Board of Supervisors Flying Blind In A Typhoon

The Saratoga Prosperity Partnership reported the results of a recent poll they did of local businesses. Over two hundred and thirty businesses responded.

According to Shelby Schneider, president of SPP:

“Fifty-nine percent of the business [sic] reported that they’re at risk of closing and they’re concerned about how to retain and pay [sic] workforce they still have. Forty-one percent of those surveyed say they have already had to lay off their workforce. A majority of businesses say that they need working capital now.”

The difference between Saratoga Springs’ response to this pending economic crisis and Saratoga County’s

It is indisputable that both the County and the city of Saratoga Springs are going to experience a precipitous drop in sales tax revenue. It is instructive to see how the city of Saratoga Springs is addressing this fiscal challenge in contrast to the County.

Yesterday (Thursday, March 26, 2020) Michele Madigan, the Saratoga Springs Commissioner of Finance, issued a press release addressing the City’s financial condition and providing estimates to the public of what the loss of revenues this year could look like (the full release can be found at the bottom of this post).

The following is an excerpt from the release:

“The 2020 General Operating Budget projects total 2020 revenues of approximately $48.7 million. At this time we are considering a scenario of a $7.8M loss of revenue for the first half of 2020.  It is harder to judge through year-end, but we may be facing a total 2020 revenue shortfall of $16 million. This scenario equates to a 33% shortfall in 2020 revenue. We are planning to manage through this loss of revenue – and we are well positioned to do so.”

March 26 Press Release

Having acknowledged the problem, the release discusses the state of the City’s finances and the release describes the Finance Department’s approach to managing this shortfall.

Contrast this to how Saratoga County is addressing the fiscal disaster we are entering. As documented in an earlier post, when the County Board of Supervisor’s Law and Finance Committee was told that the projected additional cost for the proposed raises for the County’s “essential” employees was $325,000.00 per week and that there was no way to estimate how long it would be necessary to continue this policy, one would have expected a discussion of the County’s finances similar to the review done by Commissioner Madigan. No such discussion took place. Not one County Supervisor asked “Where are we going to get the money to do this?”

When you consider that, according to the County Administrator’s own estimates, the liability for these raises could exceed $1,000,000.00 a month, one has to ask, where are our Saratoga Springs Supervisors in all of this. It is good Supervisors Gaston and Veitch have announced that they are now opposed to the existing policy but conspicuously missing is precisely what their alternative would be. News reports show that at least one Supervisor from another town who opposes the policy would still continue the increase in wages for some employees.

It would seem that essential to making any decision regarding these raises, there needs to be an airing of what if any plans exist for addressing the anticipated loss of County revenue. If for example, the county were to lose 20% of its sales tax income over the next six months, are there the reserves to absorb this loss? If not, would there need to be layoffs? Would funding for some services be curtailed?

It is time for Supervisor Matthew Veitch and Supervisor Tara Gaston to step up and show some leadership. We are heading into uncharted waters. They need to insist that the County address how it will respond to the potential short falls in revenues it faces. They need to show that they have the courage to go beyond the cronyism that dominates our County government.

The two Saratoga Springs Supervisors attend our City Council meetings. At each meeting they report to the Council. To say that their reports are banal is to be kind. They need to address the Council at the next meeting about the state of the finances of the County. If they do not volunteer this information, the members of our City Council should insist that they do.

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Finance Department Press Release

The City of Saratoga Springs is fortunate to have a healthy financial foundation as we face the COVID-19 pandemic.  The City’s economy is based on a diversity of sources, many of which are closely tied to tourism, entertainment, social activities, and our yearly racing season. We have been assessing our revenue, expenditures, and cash-on-hand as well as various fiscal tools available to the city based on near term, long term, moderate and severe outcomes.   

The 2020 General Operating Budget projects total 2020 revenues of approximately $48.7 million. At this time we are considering a scenario of a $7.8M loss of revenue for the first half of 2020.  It is harder to judge through year-end, but we may be facing a total 2020 revenue shortfall of $16 million. This scenario equates to a 33% shortfall in 2020 revenue. We are planning to manage through this loss of revenue – and we are well positioned to do so.

Since circumstances are changing daily, we are proceeding with caution regarding how to address this loss-of-revenue scenario.  Both over- and under-estimating our response has consequences.  Given the City’s good financial position and excellent community partnerships, we have many options, including cash-on-hand, healthy reserves, borrowing, various bonding tools, and shared services. 

It is too soon to determine what combination of these efforts will fit our needs.  But it is not too soon to state that all options will be considered very carefully, against the sustainability of the City government, the needs of our taxpayers, and most importantly, the health, safety and welfare of our citizens. We will not make rash decisions, and we remain confident that we can manage through this crisis while minimizing disruptions to essential City services.

Thank you,

Michele Madigan

Commissioner of Finance

City of Saratoga Springs, NY

474 Broadway 

Saratoga Springs, NY 12866

518-587-3550