ALBANY — As the pressure ramped up last week for state lawmakers to deliver a budget by March 31, Governor Andrew Cuomo launched a campaign to push his proposed property tax cuts, a plan he initially outlined in January’s 2014-2015 Executive Budget Address that he estimates will deliver $2 billion in tax relief to state residents.
Cuomo, who capped property taxes at two percent early on in his tenure, chalks the “structural cause” of high property taxes up to the proliferation and expense of local governments and argues now that the state has done their part to cut spending, local governments and other tax jurisdictions need to step up their efforts to reduce costs and consolidate services in order to limit spending growth to two percent a year.
The “No Excuses” initiative hinges on mobilizing the public to lobby their state representatives in support of the plan, asking them to exercise some tough love by forcing them to go on a bureaucratic diet.
According to the plan, as an incentivize for local governments to share services, residents will be eligible for the tax freeze in the first year if their leaders stay within the two percent cap. The state will then provide rebate checks to homeowners with incomes of $500,000 or less who live in those jurisdictions.
Homeowners will only receive a tax credit in the second year if municipalities continue to stay within the cap and develop a plan for sharing or consolidating services and eliminating duplication and overlap that generates savings equal to three percent of the tax levy within the next three years.
When these plans are fully implemented, said the New York State Tax Relief Commission, local governments and school districts could provide property tax relief of up to $1 billion.
North Country officials say while this plan makes sense when it comes to combating the waste and sprawl in downstate municipalities — several cite New York City-area towns with lavish facilities, town-sponsored racing teams, generous insurance and retirement packages with low thresholds for public service and tangled thickets of water, sewer, gas and fire districts — this doesn’t apply to their towns, the ones that have been consolidating and sharing services for years.
You can’t draw blood from a stone — there’s simply nothing left to cut.
Upon assuming office, Cuomo capped property taxes by two percent or the rate of inflation. That means towns can’t raise what are essentially their annual operating budgets more than two percent without a supermajority vote.
Paired with a sclerotic tax base and moribund economy, North Country towns are faced with rising costs with no way to effectively pay for them.
“How do you paint the entire state with one brush?” asked Wilmington town supervisor Randy Preston.
Preston said while he supports the cap and Cuomo is “absolutely correct” that reform is needed to trim away the fat from out of control downstate local municipalities — including the three cited in Cuomo’s pitch to the public, Westchester, Nassau and Rockland — he is concerned about what happens to towns who have already scaled back operations to minimal operations.
“We’re already operating on a bare bones budget — I don’t think there’s anything we can cut.”
“The North Country are pioneers at sharing services," said Jay town supervisor Randall Douglas. “Between Clinton and Essex, we’re the grandfathers of this and we’ve already done what the Governor wants us to do.”
Jay has been sharing services with town of Black Brook for 34 years, he said, ticking off a list of what his town has pared down, including water, sewer and youth facilities, the fire department and the ambulance squad.
“I support the Governor’s encouragement to get towns to think outside of the box to possibly see if they could share anything that would save taxpayer cash,” he said. “Unfortunately, I wish there was a way to financially credit what the municipalities and our forefathers have been doing over the years.”
Towns throughout Essex County share road maintenance equipment and the county uses some of Clinton County’s emergency communication towers and engages in several public health efforts with adjoining counties.
“Our town is a pioneer of sharing services,” said Moriah town supervisor Tom Scozzafava. “We’ve been doing it since the 1980s.”
Moriah, working alongside the village and hamlets within its boundaries, has trimmed away once sacrosanct civic institutions like the village justice court, the assessment of real property office, public library, senior citizens center and meal delivery programs.
“We’ve held the line the best we can,” he said.
Scozzafava said the cap paired with state mandated costs have created a perilous situation and wonders if Cuomo’s proposal would unfairly penalize the residents of towns who stay within the cap but are subject to other tax jurisdictions, including the school, fire and village districts.
State retirement benefit programs and health insurance costs have skyrocketed, he said, costs that towns have little control over. As a result, the town cannot replace employees who have retired, including law enforcement officials, clerks, the highway superintendent and other staffers.
“While we’re doing everything we can to stabilize the property tax, our constituency still expects us to provide services,” he said, citing an uproar that resulted when Moriah faced the decision to start shutting off streetlights and letting snow pile up in the streets.
Scozzafava said he while he fully agrees with the concept, it doesn’t cut deep enough and the state should instead focus on a reform of the entire system:
“The property tax system is antiquated and supports more services than originally intended,” he said, citing fire districts as an example.
“Based on the value of your assessed property, some residents are paying twice as much for the same service,” he said. “Everyone should be paying equal.”
Ticonderoga town supervisor Bill Grinnell said the cap wouldn’t be an issue if you could expand the tax base. But zoning regulations make expansion limited, he said, and the amount of state-owned padlocked real estate, like campgrounds on lakefront property, continues to grow.
“The Adirondack Park is a great thing to have — it’s New York’s playground,” he said. “The problem comes when you have only the Adirondackers paying for that playground. Everyone needs to start paying.”
Grinnell said the state should instead take a look at reforming the 480-a Forest Tax Law that grants tax relief to owners of large tracts of timberland.
There are other factors when it comes to consolidation, both practical and personal:
“There’s so much distance between so many of our small towns,” said Assemblywoman Janet Duprey, the state representative who serves a large chunk of the North Country. “It’s not like you can hand a shovel across the way: How many miles of roads are towns plowing and how they going to be plowed?”
And there are family aspects to consider in tight-knit communities, she said, elements that put a personal, human and very real spin on slashing services and employees.
“In our small communities, we see these people every day — it’s an emotional issue that hits at the very essence at what it means to be a community.”
Other lawmakers, including Scozzafava, worry that cutting services might result in layoffs that would funnel residents onto public assistance.
On a broader level, government solidation remains generally unsupported by voters — only 38 villages have dissolved in New York since 1920, among them is Keeseville in the town of Chesterfield, a process that is set to be completed by the end of this year.
Gerald Morrow, the longrunning Chesterfield town supervisor who is shepherding the town through the issue, said that he realizes that dissolution is an extremely sensitive issue, taxpayers in both the village and town will be better served in the long run:
“I’m all about saving money and saving taxpayer cost,” he said, “and I can’t see us going over the cap next year — even if we are taking over the village.”
Morrow said that he's always been neutral on the issue and it's difficult to show residents of the soon-to-be-extinct village, many of whom are older folks who have lifelong bonds to the dissolving civic institutions, tough love when it comes to consolidation.
“People want answers, but they don’t want to hear the real answers,” he said.
At a meeting of regional lawmakers in Elizabethtown on Thursday, Feb. 27, New York State Association of Counties (NYSAC) Deputy Director of Community Relations Katy Vescio told lawmakers from across the North Country, including Franklin, Hamilton, Saratoga, Warren and Washington Counties, that their concerns are duly noted and they’ll continue to lobby state legislators this month with recommendations to be included as amendments in the final budget.
“We’ll try to get them into the one-house budget bill,” she said, referring to the bills that will be hammered out by the assembly, state and executive office before the three parties meet this week to determine the final outcome.
“At the highest level, we’re in total agreement and just need to work together as to how we can achieve these goals.”
Douglas, the Jay leader and Essex County board chair, said Deputy Secretary of State for Local Government Dede Scozzafava and other state officials are aware of the concerns of local lawmakers and are actively working towards finding common ground as negotiations continue in Albany.
Each house in the state legislature is expected to pass their one-house bills sometime this week.
One of NYSAG’s main objectives, said Vescio, is to advocate for state mandate relief for major state programs that counties administer.
A more simple tax relief proposal, they said, would be to fiscally restructure how the state pays for its own programs, including special education for preschool children, public defense for the indigent and, the perennial albatross around counties’ necks, state reimbursement for county Medicaid payments.
Last year, the state spent $53 billion on Medicaid, 25 percent of which was a one-time county share, or a $13.2 billion chunk.
New York is one of only two states that require counties to chip in for Medicaid payments, said NYSAC Deputy Director Mark F. LaVigne.
“California counties pay a small share, but it’s not anywhere near what New York pays,” he said.
The total proposed state budget is $90 billion. If the state took over the Medicaid share from each county, say analysts, the state budget would increase by about 15 percent and cash-strapped county budgets would drop by 40 percent.
This means Essex County would have an additional $7 million to fund other mandated services — not an inconsequential sum considering the county’s total levy of $18 million.
Analysts say that such a plan might work if phased in over a five-year period and would be more effective, practical and simple than the current proposal.
There are other issues:
NYSAG believes the bill will be “extremely complex” to implement; that it doesn’t credit the North Country pioneers of shared services, that it proposes a “highly inefficient” structure for distributing state-financed rebate checks to homeowners and, perhaps most tellingly, relies heavily on mundane and intricate nuances of real property taxation, assessment and equalization that taxpayers will find difficult to understand.
What would a passage of an unaltered bill ultimately mean for North Country homeowners? A check for tens of dollars per year, if the numbers crunched by this reporter are any indication, due to the county and towns’ already-low property tax rates.
The Valley News reached out to the Governor’s office repeatedly for clarifications and answers to our list of specific policy and implementation questions.
They did not respond by the time this story went to press.