Suffolk reserves $43 million to settle contracts with two unions, including Association of Municipal Employees, budget director says

Suffolk County’s proposed $4.59 billion spending plan in 2027 should sufficiently cover the anticipated contracts with two municipal unions, including the county's largest, which would total nearly $43 million, according to the legislature’s nonpartisan budget review office.

The Suffolk County Association of Municipal Employees, which represents about 5,400 active employees, has been without a contract since the end of 2024. It is one of two remaining unions still without a contract. The other is the Suffolk County Detective Investigator's Police Benevolent Association — the smallest police union.

Benny Pernice, deputy director of the budget review office, said the proposed budget includes funds in a contingency account "based on a set of realistic assumptions" that would cover new contracts either at the end of this year or in 2027.

His comments Monday came during a summary of the budget office's report on the spending plan. The summary, given to legislators, kicked off a weeklong set of budget hearings.

The report says there is $78 million in contingencies, including $42.9 million for contract settlements, in the proposed budget. Pernice said funding included in those accounts will be used to offset the new union contracts' expected wage increases.

Ben Zwirn, the Association of Municipal Employees government relations director, said at Monday’s meeting that the union hopes the "positive assessment" of the 2027 budget "is an indicator that our long-awaited contract for the workers who keep Suffolk County running day-to-day will soon be finalized."

The proposed 2027 budget includes about $2.6 billion in salaries, benefits and other personnel costs, representing about 57% of the entire spending plan.

AME members were told in late August of a contract agreement in principle that would raise wages 17% over five years. Additional details in the contract are still to be finalized.

The budget review office's report concludes that overall the recommended budget is "fiscally sound" with conservative expenditure and revenues. The county has "considerable resources" for "unanticipated emergencies," including more than $800 million in its dedicated pool of reserve funds.

Those reserves were highlighted in a recent bond upgrade from Fitch Ratings. The credit rating agency upgraded a county bond rating from AA- to AA with a stable outlook. It’s the fifth bond upgrade since Suffolk County Executive Edward P. Romaine took office in 2024, the county announced last week.

Higher bond ratings allow the county to spend less on interest when borrowing money.

The proposed budget did not raise taxes for the general fund, to which all county residents contribute. But police district and district court taxes paid by residents in the five western towns increased by just over $20 million. Those taxes increase 2.63%, under the state tax cap of 2.64%, according to the budget review.

While Pernice painted a positive budget picture, he said the county should be cautious in how much of a surplus it carries over from year to year. The proposed budget estimates a $283.5 million surplus in the general fund for 2026, which would be used to balance the fund in 2027. A sales tax surplus of more than $100 million contributes to that figure.

Pernice said the high figure is "better than the alternative" of carrying a deficit. But the large starting fund balance subsidizes expenditures, which in the general fund allowed the county to avoid a tax increase.

But Pernice said the county leaves itself vulnerable in the event of financial crisis. If the surplus is used up, the budget has more expenditures than revenue, he said.

A budget reform commission in 2007 examined that issue and recommended against generating large surpluses every year to offset the next year’s expenditures, he said. The alternative would be to use the surplus for a one-time expense or place in a reserve, Pernice said, "not to necessarily carry it year to year and use it as a revenue." 

"I’m not sounding the alarm bell," Pernice said. "I’m just saying that we’re kind of back to that practice."

By Joe Werkmeister

joe.werkmeister@newsday.com

Joe Werkmeister joined Newsday in 2022 and covers Suffolk County government and politics. He is a graduate of St. Bonaventure University and previously worked as the editor of two North Fork community newspapers.

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