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News Release

January 3, 2011      

For Further Information Contact:
William R. Steinhaus, County Executive
(845) 486-2000

State Demands County: Lie about Stimulus Job Creation Numbers
NY State Threatens to take back Millions in Stimulus Funding for Mandated Programs already Delivered

Poughkeepsie, NY… “New York State cannot threaten public officials to knowingly falsify  legal reporting documents but that is exactly what New York State officials are doing,” said Dutchess County Executive William R. Steinhaus. 

“NY State plugged its’ budget deficit hole by using federal stimulus money to pay its’ share of a decades old state mandated children’s program, and is now demanding the county report bogus job numbers to justify state government’s use of the federal stimulus money,” said the Dutchess County Executive.

“It is outrageous county government would be the victim of this kind of political and financial extortion by New York State with their demand that Dutchess County government invent bogus numbers of stimulus jobs,” said the five term County Executive. “This is simply a hoax on the American people and just adds to the cynicism of taxpayers who question how many of the stimulus job numbers are “real”.  We now know from first hand experience that here in NY State stimulus job totals have been distorted.  Imagine if the Dutchess numbers are multiplied across NY and the nation how many other so called reports of jobs created and retained are bogus. Given this example, maybe it’s time for state and federal investigators to drill into these stimulus jobs reports and determine what’s real and what’s fabricated?” added the Executive.

What’s the issue? New York State Education Law mandates county governments provide programming for the education of preschool children with disabilities.   By state law, the cost of the programming is split, with 59.5% of the funding coming from New York State and 40.5% mandated to come from local county property taxpayers.   New York State opted to reimburse counties for the state’s portion of 2009-10 school year program costs using ARRA stimulus funds, an option under the State Fiscal Stabilization Funds for Government Services.   NY State required certification from County Executive Steinhaus that the county would “submit any and all reports prescribed by the New York State Education Department….. They will include, but may not be limited to, an accounting of all funds received and a report on the dollar amount associated with jobs saved, jobs created and programs delivered.”  

Dutchess County submitted the required information to the state, but changed the number of jobs saved/created from the state’s pre-calculated 64.23 job figure to the correct number, “0”,  since the program is state mandated, has existed for decades, and will continue in the future with the state and county obligated to produce monies to fund it.  

“We have been and continue to be willing to certify that money from the state paid for the state’s share of the mandated program. What money the state uses, or where it comes from to pay its obligation under its own state laws, is the state’s choice. However, Dutchess County is simply not willing to lie about the retention or creation of the jobs to perform these state mandated services for one reason – the program would have still existed.  Absent a new state law eliminating the program; the same number of jobs would still exist even if there had been no stimulus ARRA money used by the state. The state would simply have continued to pay those same providers of the children’s program with other state funds instead of federal money. Any suggestion that state legislators or the governor would have abandoned this children’s program is pure fantasy,” said Steinhaus.

County officials have again notified the New York State Department of Education that the County had properly fulfilled all applicable reporting and accountability requirements for the receipt of $5.5 million in American Recovery and Reinvestment Act (ARRA) funding for the state mandated preschool special education program, reporting “0” jobs retained/created.     New York State officials have threatened to “recover” the ARRA monies from Dutchess County taxpayers if the reports are not modified to show 64 jobs retained/created, in accordance with a state and federal pre-calculated job creation formula.

County Attorney James Fedorchak explained in a letter to Deborah Cunningham, Coordinator of Education Management Services for the New York State Education Department, “These jobs held by contract workers have existed for decades funded by a combination of state and county funds.  They existed when the state opted to supplant state dollars with federal dollars and the same “jobs” will exist after federal money – all because state law so requires.”

Created jobs would be new positions created or filled.  These jobs have existed for many years and are not new.    Retained jobs would be jobs that otherwise would be lost.  These jobs would not have been lost as the County is mandated by state law to continue to provide the preschool special education program.

“NY State has a legal, binding obligation to pay their share for preschool special education program,” said County Executive Steinhaus.  “The county performed its’ mandated obligations; the State must pay its financial obligations.  Where the State gets the money from is their responsibility, not the County’s. If state officials want to lie that’s their business, but Dutchess County won’t be part of the lie,” County Executive Steinhaus explained. “Unless New York State is willing to publicly and officially state that this is an optional program that counties do not have to provide, we cannot claim jobs were saved since there was no chance those jobs would have been lost.”

County Attorney Fedorchak did advise NYS Education Department officials that “should New York State refuse to reimburse County government monies it has an obligation to provide for this program, …the state will face the suspension of the programs and services due to lack of funds to compensate providers.”   

County Executive Steinhaus stated, “Dutchess County cannot and will not continue to provide a state program if our only choices are:  a) lie about stimulus job numbers to receive obligated funding, or b) the state fails to reimburse county taxpayers for county government delivering the states program.  

“Just because the state doesn’t like the jobs number provided by the county doesn’t mean they can demand it be changed to suit their own political agenda.  These questionable reporting requirements call into question the credibility of the entire ARRA program.  This is the kind of dishonesty that has made the American public so distrusting about the effectiveness of the federal stimulus program. Considering Governor Andrew Cuomo has made ethics and accountability a major initiative, maybe stimulus job reports would be a good place to add to his list needing attention,” concluded County Executive Steinhaus.

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