Pulling back from brink, county, schools agree to talk

By Dan Hust
MONTICELLO — April 2, 2010 — The 12 school districts serving Sullivan County almost didn’t get their uncollected tax checks yesterday – almost.
County Treasurer Ira Cohen had been considering withholding a portion of the funds the county owes the districts due to an extremely tight fiscal situation.
“As is the case every year, I am concerned about our ability to maintain a positive cash flow after April 1, due to the obligation imposed upon us by the NYS [Real Property Tax] Law to make our school districts whole on April 1,” he wrote to legislators on Tuesday.
“We have approximately $25 million on hand in the general fund (which will be depleted by over $2 million when we make payroll this week), and our obligation to our school districts this year is over $17 million!”
Cohen had been trying for several weeks to gain some ideas and cooperation from local school superintendents, including the possibility of paying the owed taxes in installments, like the county allows with its taxpayers.
“While the law imposes this obligation upon us, I can’t believe that the intention of the law was that we should have to go into debt, at the expense of the taxpayers of the county, in order to borrow money to pay our other obligations because we paid nearly 75 percent of our cash on hand to the school districts, without any showing that they needed all of that cash at one time – while it will take 28 months for us to collect this money in delinquent taxes in order to make ourselves whole,” he wrote.
Cohen was told by a superintendent that BOCES District Supt. Larry Thomas had spoken with all the superintendents about the issue in March, but Cohen and Thomas were repeatedly unable to get in touch with one another.
Frustrated, Cohen told legislators he wouldn’t release the monies owed the districts until he spoke with Thomas and the other superintendents.
Thomas and Cohen finally connected on Wednesday, and as a result, checks were scheduled to be cut yesterday – in their entirety.
“Until the law is changed, or other arrangements are made, our county government will have to get by with less, as we are forced to do every year,” he told the Democrat yesterday.
In an interview on Wednesday, Thomas sympathized with Cohen’s concerns but noted the county has a legal obligation to release all the funds on April 1.
“I empathize with the county,” Thomas affirmed. “I don’t know what the good answer is.”
He said school superintendents had expressed a reticence to work out an agreement at this late date, especially with the state having just withheld millions of dollars in the expected March state aid payments – which may not arrive until June.
“The funding stream,” he explained, “is touch-and-go.”
Fallsburg Supt. Ivan Katz agreed, saying a withholding of any amount of funds due at this time “could have serious impacts on districts.”
“Certainly at this point I am not in favor of giving that up.… We don’t have any wiggle room to do anything,” he remarked. “... I have to protect the financial integrity of the school district as much as Mr. Cohen has to protect the financial integrity of the county.”
That said, both Thomas and Katz confirmed they are amenable to future discussions with Cohen and other county officials.
“I’m certainly willing to go to the table and listen,” said Katz.
And that’s what will happen by next year.
“I have already begun to reach out to school officials so that we can immediately begin the process of working and planning together to either advocate for a change in the state law and/or enter into mutually consensual agreements that will be beneficial to both the schools and the county government – in reality, to the taxpayers of the county,” Cohen said yesterday.
“Separate meetings have already been scheduled, starting next week, with officials from the Fallsburg, Sullivan West and Monticello school districts, and I expect the others to be scheduled shortly.”
In the meantime, said County Manager David Fanslau, Sullivan County government will get by as it always does – so long as the governor does not expand his delayed-aid program to county-run offerings.
Fanslau added that he and the Legislature support Cohen’s attempts to rework the payment system – including having the state take over that obligation.
He acknowledged that’s unlikely but pointed out that the districts’ fiscal year (for which this money is traditionally used) doesn’t start until July 1.
“We should have the ability to pay that over time,” he said.
Legislator Leni Binder had supported Cohen’s initial desire to withhold payments.
“It’s almost a Tea Party kind of attitude, but it’s one I’ve said for a long time,” she remarked on Wednesday. “With the middle class being so strapped and in such trouble… I would certainly support making a strong statement.”