Photo by Pete DeMola
Town of Plattsburgh Supervisor Michael Cashman listens to a state budget briefing by state Department of Transportation Commissioner Paul Karas on April 12 in Plattsburgh.
PLATTSBURGH | Gov. Andrew Cuomo said hammering out this year’s $168.3 billion spending plan was tricky because of a $4.4 billion deficit largely caused by federal shortfalls.
“This is probably the toughest budget we had to do because we’re battling a hostile federal government,” Gov. Andrew Cuomo said in a conference call with editorial boards earlier this month.
Now with the spending plan in the rearview, state officials are fanning across the state to brief local officials on its contents.
Department of Transportation Commissioner Paul Karas touched down in Plattsburgh last week.
As a workaround to the new federal cap on state and local tax deductions, employers will be given the option to shift to a payroll tax.
The budget also includes two new charitable contribution funds: one will support education, and the other for health care.
Taxpayers, he said, could make voluntary donations to these funds and receive a partial tax credit against their state and local taxes.
Karas also touted the state’s new sexual harassment policy, safeguards against election cyberattacks and a new law removing guns from those suspected of domestic abuse.
“That’s a national precedent,” Karas said. “Upon arraignment, the judge may take guns away.”
ECONOMIC DEVELOPMENT
Despite some of the flashier policy issues contained in the budget plan, the briefing largely focused on state efforts to prop up the heavily subsidized North Country economy, including $63 million for state-owned ski facilities Whiteface and Gore and $38 million for improvements to Plattsburgh International Airport (PIA), a funding package that constitutes the majority of the project’s $43 million price tag.
Such investments in upstate infrastructure are “unprecedented,” Karas said, but are also necessary because rural airports don’t have the means to generate additional revenue like those in the New York City metro area.
“That is unheard of across the state,” he said. “It just keeps those airports viable. Airports are all about economic development.”
While some of the $38 million has been flagged to provide enhancements on the passenger side like food service operations, most has been allocated to fund improvements along the flightline.
North Country Chamber of Commerce President Garry Douglas said the upgrades are critical to drive visitation into the Adirondacks and bolster the emerging aerospace and transportation cluster.
“Where things move is where prosperity occurs,” Douglas said, citing the region’s relationship with Canada.
United Express is poised to offer service to Washington, D.C. in August, a measure Douglas called “a historical new level of service.”
A new state-funded customs facility at PIA will also pave the way for offering international flights.
“There has always been serious interest and it will happen,” Douglas said.
And investments in Norsk Titanium are poised to allow for the creation of 380 jobs, he said, citing a $125 million state commitment to the manufacturer.
The budget also contains ongoing investments in funds to bolster clean water drinking infrastructure, funds to combat algal blooms and $13 million for a study designed to probe expanding lodging opportunities in the Adirondacks.
The state budget plan boosted public education funding by $1 billion.
But the biggest element — a mandate that requires districts steer that aid to the neediest schools in the district and strengthen accountability reporting — largely does not apply to the North Country, where most school districts contain just one school.
LOCAL REACTIONS
The state budget contains a $750 million allocation for the Regional Economic Development Council program, which has steered $549.5 million to the North Country since Cuomo took office in 2011, including $64.9 million last year.
“There’s never been a governor who has made an historic investment over an eight-year-period as this governor has,” Douglas said, who also touted state investments at the former Frontier Town site in North Hudson. “He is our friend, and continues to be our friend.”
The spending plan contains $175 million for workforce development efforts.
“Previously, the state had not invested one red cent,” said Sylvie Nelson, executive director of the North Country Workforce Development Board. “One hundred and seventy five million for us would certainly be a game-changer at the local level.”
The budget also continues the mandated local government shared services panels for an additional three years.
Town of Plattsburgh Supervisor Michael Cashman said he welcomed the challenge to find savings for local taxpayers, and said efforts have continued outside of the parameters of the state program.
“We continue to come together with county legislators to really try to watch the bottom dollar,” Cashman said.
Following the briefing, local officials gave Karas a tour of transportation facilities — Douglas said he was excited about working with the state on exploring green transportation issues — and treated him to a local delicacy: the Michigan.
“Being a Chicago native, I will take mine without ketchup,” Karas said.
BROADBAND CONCERNS
As the state enters the final stretch to fully wire the state with broadband by the end of the year, local officials harbored concerns over if their communities would be wired.
Beekmantown is poised see 1,266 locations addressed through $4.8 million in total grant funding.
Verizon received the contract, part of $70 million in grant funds the provider received statewide.
But Beekmantown Supervisor Sam Dyer said the provider is backlogged with contracts and expressed concerns the provider would be unable to meet the state-mandated deadline.
“Verizon has the contract with Beekmantown. They don’t have people to do the contract,” he said. “From what I’m hearing from Verizon, they may not start until fall.”
Dyer cited intermittent and poor service by current providers, and said improved service is sorely needed.
“Every town is like this,” he said. “This is huge. We’re willing partners. It’s our people who are hollering and who want it.”
Verizon said they have not determined a timeline for work to commence.
“Still planning our build outs, so nothing to report out yet,” Raymond McConville, a Verizon spokesman, told The Sun.
Cuomo touted the program in the conference call earlier this month.
“If you’re going to a hotel in the Adirondacks — ‘I still have to stay in contact with work, I need high-speed broadband’ — we’ll be the first state to do that,” he said.
TAX ANALYSIS
E.J. McMahon, research director of the Empire Center think tank, said the optional corporate payroll tax contained in the budget will have “extremely limited appeal.”
“Very few firms, if any, will opt into it,” McMahon wrote in a budget analysis. “The firms that most want and need such a work-around are high-earning investment and professional partnerships, most of which are pass-through entities not covered by the corporate tax.”
The administration’s inability come up with a version of the payroll tax for these entities, he said, “suggests that tax officials have found it even more dauntingly complicated than the corporate version.”
The charitable foundation component is “less complex, easier to implement and effectively could benefit many more tax filers,” McMahon said.
“However, it’s difficult to see how the Treasury Department and Internal Revenue Service can possibly accept this work-around,” he said. “It would violate long-standing IRS principles based on the voluntary nature of charitable contributions. If allowed and exploited on a broad scale, it would blow a hole in federal budget revenue estimates.”
