What Should County Do With $163M Fund Balance?

By Holly Crocco

When Dan Birmingham, R-Southeast, rejoined the County Legislature last year after a 13-year hiatus, the lawmaker nearly fell out of his seat when he learned how much was in the county’s fund balance… $163 million.

The fund balance is an accumulation of what is left over and unspent from each year’s budget. It has been amassing, essentially, since the incorporation of the county. And while some may say you can’t have too much extra cash on hand, Birmingham begs to differ.

“I’m going to make the argument tonight that we have excessively high fund balance in Putnam County,” he said at the Aug. 24 Budget & Finance Committee meeting. “This is normally caused by poor budgeting practices, unduly high property taxes, and political reasons.”

Birmingham said that from 2010 to 2024, which spans four different administrations, the county’s fund balance grew from $33 million to $163 million. While the total only increased slightly from 2010 to 2019, by about $28 million overall, it shot up in the last five years more than $130 million.

Birmingham said that while having “enough” fund balance is a good thing, having too much leads to higher spending.

He referred to the general fund appropriations that have been rising right along with the fund balance. From 2010 to 2022, the budget increased by about $23.4 million, from $112.3 million to $135.7 million. However, from 2022 to 2026, the budget increased by about $70 million, to $205.1 million this year.

“We’re spending so much more now than we were three, four years ago,” said Birmingham. “That’s a problem. I think we have a spending problem.”

And as such, the county continues to collect more taxes. “We typically underestimate revenue – sales tax, primarily – and over appropriate,” said Birmingham. “We underspend… So we have a $205 million budget this year, that’s on top of this $163 million (fund balance). I would submit we have way too much fund balance and we need to do something about that.”

That “something” could be to move the money into budget lines that would allow it to be allocated to upcoming projects and services, instead of collecting more taxes to pay for those things.

“A wholesale return of a significant amount of tax dollars to the taxpayers in 2027 (via a reduced tax levy) – that’s what I’m hoping for,” said Birmingham.

Legislator Amy Sayegh, R-Mahopac Falls, agreed.

“It’s time for the taxpayer to see some relief either through reduced sales tax or lower property tax,” she said. “I would like to see it go back to the taxpayer.”

Legislator Erin Crowley, R-Mahopac, argued that the county may not want to spend down that fund balance, seeing as it is trying to provide better support for retirees, maintaining a large workforce, and is constantly being hit with unfunded mandates from Albany.

“We don’t have this general pot of $163 million just sitting there,” she said. “There are reasons why we have it, and if you break it down, how much is left over after were done with that?”“

Legislator Nancy Montgomery, D-Philipstown, said even individual departments are often not spending their whole budgets.

“Excessive fund balance should be in accordance with a long-term plan,” she said. “I don’t think we have that in this county. We have a capital projects plan, and as far as everything else, I don’t see a long-term plan.”

Legislator Jake D’Angelo, R-Carmel, said he would support the Legislature having the power to delegate those funds.

“It is a lot of money and I think that anything we can do that can tangibly lower taxes for people through property tax, I think that’s the best way to actually give effect to taxpayers,” he said. “The best way to do that is to give the Legislature the power to assign fund balance.”

However, Acting Commissioner of Finance Alexandra Gordon said the county is operating well within NYS Office of State Comptroller guidelines.

“I’d like to think we’re in compliance,” she said. “I don’t believe Putnam County to have poor budget practices at all. I think, actually, we have a really good budget practice compared to other municipalities we have seen. I think we’re very transparent.”

Further, Gordon said the administration questions “every single thing that goes into that budget… So I don’t agree that we over-appropriated anything,” she said.

Rather, she said circumstances change. For example, positions might be accounted for in the budget that never end up getting filled. “The intent is not to put those positions in there to fluff the budget,” said Gordon. “The intention is to fill those positions.”

In addition, she explained that the “Wayfair” decision in 2019 that allowed the county to begin collecting sales tax on online orders made from out-of-state sellers, as well as the COVID-19 pandemic, spiked fund balances – as noted by the New York State Association of Counties.

Those numbers, she said, are expected to “settle down.”

Again, Birmingham pointed out that they’re not just talking about a few million dollars.

“The fund balance is outside the $205 million that we have appropriated in 2025 just for the general fund,” he said. It is another $163 million. “It’s 83 percent of our budget.”

Following the discussion, the Legislature voted 7-2 to rescind a 2012 resolution that authorized the commissioner of finance to allocate fund balance, thus giving that power back to the governing body. Legislators Laura Russo, R-Patterson, and Crowley were the “no” votes.

“If the practical effect is to remove the commissioner of finance’s delegated authority over assigned fund balance and shift those decisions to the Legislature, I don’t think I can support it in this forum,” said Crowley. “This isn’t a transparency resolution, it’s a transfer-out-of-control resolution without adequate guard rails.”

Birmingham, however, said the resolution simply takes back the county’s power that was delegated in 2012 – when the fund balance was much smaller. “At that time it wasn’t an amount worthy of continual focus by the Legislature,” he said.

Montgomery added: “I think we’re not talking about taking power away from finance. I think what we’re doing is putting a transparent governing policy in place.”

The legislature then voted unanimously to request an audit by the State Comptroller’s Office of the fund balance.

Following the Legislature’s meeting, County Executive Kevin Byrne said he’s proud to see Putnam boasting a healthy fund balance while delivering quality programs and services to residents – all done transparently.

“I am the only county executive in Putnam’s history to proactively request that the state comptroller audit our finances,” he said. “We have nothing to hide and I’m proud to have the most fiscally conservative and responsible record of any county executive in Putnam’s history.”

Since taking office, Byrne said his administration has responsibly used the fund balance to cut taxes, reduce debt, and avoid unnecessary borrowing.

“We delivered the largest property tax cut in county history, eliminated sales tax on essential clothing and footwear, paid off the county golf course bond, limited new borrowing, and used cash to fund major infrastructure projects rather than saddling taxpayers with hundreds of thousands of dollars in future interest payments,” he said. “We also established Putnam’s first sales-tax-revenue-sharing agreement with our towns and villages, meaning the county keeps less of those revenues and sends more directly back to our local communities.”

The county executive said the results speak for themselves.

“Before I took office, Putnam County property taxes had increased for more than 10 consecutive years,” said Byrne. “Since becoming county executive, we have stopped that cycle and begun moving in the opposite direction – responsibly drawing down reserves while cutting taxes and reducing our reliance on debt.”