Municipalities have been faced with many difficult budget decisions over the past decade. Many had the foresight to anticipate the current state of the economy. They started reducing budget expenditures, payroll and some services in response to the economic downturn. That is how local government operates. It is, at most times, the leanest and most efficient form of government.
Now enter into the equation the property tax cap. Nothing more than an Albany gimmick, it has now become the rallying cry for state politicians thumping their chests as they mislead local taxpayers into believing “mismanaged local governments” will be brought into line. It came without mandate relief, without facts, without state budget reforms, no increase in municipal aid and without New York City having to comply. Yes, again, what is good for upstate is not good for the City. It also goes against the longstanding home rule concept. It is difficult to make local decisions while trying to stay within a parameter that certainly does not fit every municipality. Approximately 15 percent of the real property tax dollar comes from towns, villages and special districts.
For the most part most revenues available to Towns have been declining; mortgage taxes, sales taxes and aid to municipalities (AIM). This forces municipalities to look at raising other user fees, licenses, fines and permits. Mandates have continued and increase although it was promised there would be relief. The cost and maintenance of water and sewer infrastructure, roads and bridges, personnel services all continue to increase.
So why is there an attack on local government? According to the Governor there are 10,500 local governments. That is a purposely stated gross exaggeration. Approximately 8,000 of those ‘governments’ are local special districts such as water and sewer districts. If you can’t be honest on a simple fact like that what are you trying to hide? The answer to that is a regional less responsive government. The more distant a government is from the people, the more control government has. You can see that with all the economic councils and other means for localities to qualify for funding. Meet the standards that the state and federal government dictate and we will allow the crumbs to fall from Albany to the peasants. While I am a firm believer in competition, redistributing local taxes to compete for funding, wastes dollars as well as creates winners and losers. Why not either leave the tax dollars local or distribute funds evenly as best possible? We will leave that topic for another discussion; but make no mistake these schemes are nothing more than the premise for consolidation under the Trojan horse of local inefficiency.
Everyone agrees on one point; New York State taxes are too high, PERIOD! The Tax Foundation recently published that New Yorkers face the highest combination of state and local taxes in the nation. It is also the second worst state to do business in. It is not surprising taxpayers are most vocal about those facts at the local level. Local government is the most responsive and the only opportunity where elected officials are the most accessible. Since that is the scenario it is also most probable that a smokescreen political hoax can be pulled off over the citizenry. Use the Albany bully pulpit, yell from the mountain top your property taxes are too high and the cavalry is coming to save the day! Once you create the false narrative, everything else will fall into place.
While local government officials are concerned about continuing services that have been taken for granted, crumbling infrastructure and rising costs, Albany is busy creating false economic narratives, creating winners and losers, and trying to infer New York is moving in the right direction. Tying a 2 percent tax cap to inflation, with this year’s cap predicted to be .12 percent, Albany brags about a 2 percent spending cap. They can’t even play by their own rules. With budget gimmicks such as “borrowing” funds from the New York State Insurance Fund and other Authority spending, it isn’t even a true 2 percent. Every local government is trying to create the most equitable budgets with services and infrastructure maintained at a minimal level. At the same time, state government remains a runaway train with misplaced priorities. The promised mandate relief has not arrived nor has the increase in state aid arrived. The only assistance to reach local government’s doorstep is empty rhetoric.
While there are several issues to choose from, I will use infrastructure as an example. It is not just a New York State problem but a nationwide issue. Many officials across the state lobbied and have written letters to the governor and other elected officials. At issue was a 5 billion dollar settlement the state received and possible uses for the influx of funds. Many wanted the funds to be distributed to local governments to help fund much needed infrastructure projects. The request to date has been ignored. It is mentioned in budget talks, referred to in the budget but I have yet to see any distribution of funds to help local government or to help offset the tax cap.
What I have seen is the latest scheme creating competitive grants, that if you hit the lottery you can win funding, with the right language and agenda of the king makers in Albany. We do not need a new program. CHIPS (Consolidated Highway Improvement Program) is already in place and have an adequate formula to distribute funds equitably. We do not need a new scheme, more bureaucracy and another reward system for political cronies. In the last two years the average cost to a motorist to maintain their car has increased from $1,600 dollars a year to $2,000 dollars due to failing infrastructure. We need to get working dollars to local municipalities now, while oil prices are low and more work can be completed with a savings to the locality with lower prices. Hey that might even help the economy. Just a thought!
The other issue is the disparity between upstate (Dept. of Transportation) and downstate (MTA). The proposed five year capital plan has a 6 billion dollar difference in funding. Why is there such a gap? It is understandable that there would be gap but is 6 billion reasonable? That spending gap, along with the fact that “MTA” county payrolls have an added “MTA” payroll tax, seems excessive. The bottom line is stop making new self-serving programs and uses the formula that works. Decrease the spending gap between upstate and downstate. That will immediately help improve local infrastructure and alleviate the financial strain and budget difficulties facing local governments.
Addressing a complicated issue in a short column is difficult. Taxpayers need to revisit the tax cap hype and determine if it is the answer to their tax concerns or a political shell game. Is it propaganda propping up a broken system and self-serving politicians? That’s not for me to answer for individuals. Get past the hype and find out what the long-term goals are. I am positive you will come to the realization the smoke and mirrors are just that. End the tax cap, stop creating winners and losers with more bureaucracy and schemes and send the promised mandate relief. Let the most efficient governments do their job and taxes will take care of themselves.
