County called on to spend more of savings

Putnam County has a good problem: how to best return $6.5 million from a swollen surplus to residents.

Nancy Montgomery, who represents Philipstown and part of Putnam Valley, and other legislators weighed legality and logistics at the May 12 meeting of the Rules Committee as they volleyed ideas. Among the proposals: $200 rebate checks to homeowners; replicate a state program in which homeowners receive a property-tax credit or check; send funds to residents burdened by the cost of energy, childcare or other necessities.

The debate is the progeny of a pandemic-era explosion in sales-tax revenue and federal and state aid. Incoming funds more than doubled the size of Putnam's "unassigned fund balance," an unrestricted pool that County Executive Kevin Byrne and legislators can choose how to spend.

Forecasting is never precise, but between 2020 and 2024, sales-tax revenues exceeded estimates by $47.5 million. State and federal legislators also plied municipalities with pandemic aid. Over those four years, the unrestricted surplus ballooned from $29.9 million at the end of 2019 to $78.3 million by 2024. (The 2025 figures are being finalized.)

That bounty sparked a clash between Byrne and some legislators and municipal officials who believe more of it needs to be spent. Some funds have been dedicated to capital projects to avoid "saddling taxpayers with unnecessary long-term debt and interest costs," said Byrne. "Putnam County's strong financial position is not money sitting idle."

But Montgomery and other legislators say the county should use some funds on direct aid to residents. They voted last year to set aside $6.5 million for tax relief or another giveback. The debate over how to do that continues, but people "need relief now," said Montgomery.

"A strong fund balance is good fiscal management, but ours is more than a rainy-day fund," she said. "We're holding public money while our residents are struggling. We should invest in housing, mental health services, childcare and transportation."

While state law prohibits school districts from holding surpluses that exceed 4 percent of their budgets, municipalities (cities, counties, towns and villages) and fire districts are allowed to carry over a "reasonable" amount" each year. Putnam's surplus in 2024 represented 38 percent of its $205 million budget for 2025. By comparison, Dutchess County ended 2024 with $104.3 million in its unassigned fund, or 17 percent of its $630 million spending plan for 2025.

One reason for Putnam's surplus is unexpected sales-tax growth. Putnam, Dutchess and other counties anticipated a financial hit when New York State ordered non-essential businesses to close in March 2020 due to COVID-19. But Putnam was too conservative: Its revenues in 2020 exceeded its projection by $5.7 million. As the state's economy recovered, Putnam's sales-tax revenues exceeded projections by $18.9 million in 2021, $17.4 million in 2022, $13.6 million in 2023 and $8.6 million in 2024.

Nearly $28 million of the surplus has been spent since 2021. Byrne and the Legislature spent $13.2 million in the 2025 budget, including the $6.5 million sought by legislators for tax relief and $150,000 for food programs.

This year is also the first in which Putnam is sharing sales-tax revenue with its towns and villages. Philipstown will receive $169,000, and Cold Spring and Nelsonville the minimum $50,000 each, from $2.3 million. The money, which is allocated based on population, is restricted to infrastructure projects.

"This is funding that otherwise would have remained in the county's general fund," said Byrne, who also wants to use $2 million for mental-health services. "It is now helping our local partners invest in infrastructure, public works and taxpayer relief in their own communities."

Former Legislator Paul Jonke, who proposed the homeowner rebate program before he left office in 2025, said during the Rules Committee meeting that the $6.5 ...