COUNTY-WIDE SHARED SERVICES INITIATIVE
Governor Cuomo's new initiative to reduce property taxes requires counties to assemble local governments to find efficiencies for real, recurring taxpayer savings.The County-Wide Shared Services Initiative, included in the enacted FY 2018 Budget, requires county officials to develop localized plans that find property tax savings by coordinating and eliminating duplicative services and propose coordinated services to enhance purchasing power.The property tax is the largest tax burden to the New York taxpayer, with the typical taxpayer paying 2.5 times more in property taxes than in income taxes. While Governor Cuomo has made reducing this burden a central priority of his administration, the tax is still a significant expense for property owners. The goal of this new initiative is to save taxpayers money by identifying collaborative opportunities for shared services between as many local governments as possible.
ALBANY – Gov. Andrew M. Cuomo threw up his hands Tuesday and said he has done “everything I can” to reduce high property taxes across New York State. Now, Cuomo said, it is up to voters.Cuomo, in his third and fourth stops this week across the state to give his annual State of the State speech, proposed a plan that would put the onus on county executives or county managers to call together all officials from their counties to devise ways to share government services to cut expenses.The plans would then be put before voters in countywide referendums. “Unless citizens get into the game, it’s not going to happen,” Cuomo said of the property tax growth, which has slowed since the state imposed a cap on annual property tax levy increases for local governments, including school districts.The new plan, however, excludes school districts, which are the drivers of the largest property tax bills received each year by New York State residents.A spokesman for Erie County Executive Mark C. Poloncarz said the Democrat has not yet seen the details of the plan by the Democratic governor.“But (he) does note that Erie County government is already lean and has one of the lowest tax rates” in the state, the spokesman wrote in an email response. Since his years as state attorney general, Cuomo has talked about what he believes are too many layers of government in New York. Although he once put the number at 10,000, many of those include such entities as special water, sewer and lighting districts that were approved to finance infrastructure projects, often in specific areas of a city, town or village. Cuomo made no mention of what localities have been pressing Albany to address for years: the rising number of unfunded services mandated by the state but paid for by local governments. He has been criticized most recently for vetoing a bill in December, which passed the Legislature unanimously in June, to have the state pay for the costs of mandated legal services counties must provide for poor people accused of crimes.“You pay high taxes, don’t be mad at me,” Cuomo said Tuesday morning at the State University of New York at Purchase in Westchester County, site of the third State of the State address of the six planned for 2017. Cuomo said the average New Yorker pays 2½ times more in local property taxes than in state income taxes. It was a theme he repeated at a Long Island speech in the afternoon. Cuomo’s proposal calls for county executives to submit cost-saving plans to county legislators by Aug. 1. Lawmakers will have 45 days to act and if they do nothing the plan goes before voters this fall. If the plan is rejected, a new plan for consolidation or shared services must be devised again in 2018 and go through the same approval or rejection process.Cuomo floated his government savings idea just days before he is to present his budget plan for the upcoming fiscal year.Mark LaVigne, deputy director at the New York State Association of Counties, noted Cuomo’s plan is to give voters more of a say about local spending. “If that’s the starting point, we believe there should be a referendum on whether county taxpayers should be funding state programs and services to the tune of more than $12 million a year,” he said. LaVigne added that nine major state-mandated programs already eat up more than 99 percent of the county property taxes collected statewide. Peter A. Baynes, executive director of the New York Conference of Mayors, called the Cuomo plan unworkable. “Ignoring school taxes and imposing a new state mandate is no way to tackle New York’s property tax problem,” he said. “The last thing New York needs is a mandate from Albany that would circumvent local democracy via a county-determined, all-or-nothing referendum.” The New York State Association of Towns said Cuomo’s plan comes as the state has failed to study the effects of its property tax program approved in 2011 or a more recent tax freeze program that includes rebate checks for eligible residents. Gerry Geist, the group’s executive director, said state aid to two key funding pots has failed to keep up with inflation. “We wouldn’t have any issues if the state would just address state mandates,” he said.Cuomo is traveling the state this week giving the annual address instead of the centurylong tradition of governors addressing a Joint Session of the State Legislature in Albany.Cuomo pulled out a 1932 quote from then-Gov. Franklin D. Roosevelt, in which Roosevelt said that increases in real estate taxes was “wholly” due to localities and not the state. “I have tried everything on property taxes,” Cuomo said Tuesday. He said local governments “rarely” work together to consolidate or share services on anything from combining human services departments or sharing equipment such as road-grading machines. “They would rather keep to themselves,” Cuomo said of the entities. “The opposition to this is going to be fierce because it’s going to be the entire political class that’s going to oppose it,” Cuomo said. Like his two speeches Monday in Buffalo and Manhattan, his Tuesday speeches were largely filled with glowing rhetoric about his own accomplishments the last six years as governor. He also used the Westchester address to comment on what he calls a growing “anger” in America. Without mentioning President-elect Donald J. Trump by name, Cuomo again, as he did in Manhattan on Monday, said New York State would be a blocking force to policies that would go against the state’s “progressive” history. It was a theme largely untouched in his Buffalo speech. In Manhattan, he used the word “progressive” nine separate times. In his Buffalo speech, the word “progressive” was not uttered. Cuomo will finish up the State of the State speeches today with stops in Albany and Syracuse. The details will come when he unveils his 2017-18 spending plan sometime in the next week, a budget proposal that, in total, will top out at more than $150 billion.In a sign that the heroin and opioid addiction crisis still hits New York communities, Cuomo used another State of the State to propose additional measures to address the problem, including expanding outpatient treatment, increasing criminal drug penalties for the sale of fentanyl analogs, which are forms of especially potent synthetic opioids, and expanding the number of health care providers able to prescribe a drug to treat addicts.
Public Hearing on Stopping the Solar Tax [Real Property Tax Law 487]
The Town of Evans has run out of money after years of borrowing and refusing to raise taxes as needed to address financial mismanagement that dates back nearly a decade. Vendors have gone unpaid for months, and the town has missed debt payments, officials said. The town has sought a $980,000 short-term loan from Erie County, an unprecedented request that the County Legislature approved through policy language changes Thursday afternoon."We are going to bring the Town of Evans from the brink of financial collapse," County Comptroller Stefan Mychajliw told county legislators at a morning meeting. "They're frozen from the market right now. This is their only option."The town's credit is now so poor that when it attempted to sell a revenue anticipation note last month, no investors were willing to buy it. After a personal appeal, Evans Bank finally agreed to purchase a smaller $600,000 revenue anticipate note from the town to cover payroll expenses only.
The Erie County loan – a tax anticipation note – represents no risk to the county since the county can repay itself through the property taxes it collects on behalf of the Town of Evans if the town does not repay its debt. The county will also charge the town a 2 percent interest rate, which is higher than the county's current bank investments. A revenue anticipation note is an advance of 2016 town revenues that may not be collected until early 2017. A tax anticipation note, which is what the county is agreeing to provide, is a short-term loan based on 2017 property taxes the town has yet to collect. Meanwhile, the Town Board has adopted a roughly $16 million budget for 2017 that will raise taxes by 11.8 percent, county officials said. That's on top of the 8.6 percent increase already approved for this year. The property tax increases are supported by the town's finance and accounting firm, which has made it clear that the town must take painful steps to get itself back on proper footing after years of budgetary mismanagement and neglect. Last month, the town sold a revenue anticipation note to Evans Bank so it could continue paying its employees. But that money is expected to run out by Dec. 9, said county officials. Evans Town Supervisor Mary K. Hosler said she knew when she ran for office last year that the town was in difficult financial shape, but she was still stunned by the enormity of what greeted her after she took office – thousands of missing financial transactions, internal audits never completed, and a negative fund balance of $523,000. The town currently owes vendors $700,000, she said, but those debts can't be paid before she is sure she has the money to meet payroll for this year. She also said the town's current health insurance costs have risen at double-digit rates, yet the town has shorted health costs by $900,000. The town's outside auditor, Drescher and Malecki, was so distressed by the state of the town's financial statements in 2014 and 2015 that it refused to offer a formal opinion for either year and threatened to quit, Hosler said. The accounting firm has since been hired to essentially recreate four years worth of back financial statements. "We haven’t had a good budget in seven years," she said. The county comptroller praised Hosler's efforts to try to finally address longstanding issues with the town's finances, while the supervisor thanked the county for working collaboratively with the town. "I cannot praise the supervisor enough for her aggressiveness in trying to solve the problem," Mychajliw said. "It's bad. She did not hide from it. She did not stick her head in the sand. She reached out to anyone and everyone who could help them solve a very serious problem." Hosler took over as supervisor this year, replacing former Supervisor Keith Dash, who also worked full time as a teacher in the Lakeshore Central School District, she said. Dash did not raise taxes until the 2016 budget. Prior to him, Francis Pordum served as supervisor and did not raise taxes, despite warnings from the state about financial instability. The town's financial issues have been repeatedly criticized by the State Comptroller's Office, though the dire state of the town's finances have apparently not been widely communicated with residents. At a public hearing on the proposed 2017 budget Nov. 2, only four people spoke, criticizing the budget and the Town Board for its lack of oversight. The town's financial problems were sparked in 2007 under Supervisor Robert R. Catalino II, when the town borrowed $12.6 million to install new water lines, hydrants and a water storage tower. Instead of setting that money in a separate account, as required, the town combined that money with the rest of the town's funds. Catalino said that while he approved of the borrowing, he was not in office after Dec. 31, 2007, when the money came into the town."I wasn’t there to spend one penny of that money," he said. A state audit showed that $2 million of that money was used to cover operating expenses, mostly for the town's troubled water operations. Ever since then, the town has relied increasingly on revenue and tax anticipation notes to make ends meet. "They just corroded the fund balance," said Supervisor Hosler. "The water fund was borrowing from the general fund, which is a misappropriation of money, to the tune of $3.6 million." Hosler blames the Town Board for its lack of oversight. She recognizes that by further raising taxes on the shrinking population in Evans, she's making unpopular choices. But she also said that with her background in investments and banking, she knows what must be done to clean up the town's financial mess. Hosler was a regional vice president for Evans Bank until retiring in 2013." It’s political suicide, as people would say, but is it the right thing to do?" she said. "It’s absolutely the right thing to do."The State Comptroller's Office has been sounding the alarm on the town's finances since 2012. Two audits criticized the town for poor oversight and financial records that were “inaccurate, incomplete and unreliable.” “The board is not in a position to properly monitor the town’s financial condition,” the 2016 audit concluded. An audit issued in 2012 criticized the town for allowing the water fund to sustain repeated operating losses. The town also improperly entered into a lease-purchase agreement with a third party for equipment and machinery that had been previously acquired, the audit said. At the time, the town put much of the blame on a former finance director Charles Katra and former town supervisor Pordum.[Read the Town of Evans 2012 audit] Four years later, when the comptroller’s office reviewed town finances again this year, it found the town spent more than $281,000 for various accounting and audit services, “but many significant audit findings and accounting deficiencies remain unaddressed.”The board also did not ensure that its “corrective action plan” to address the deficiencies was implemented, the audit said. The comptroller's office also listed the Town of Evans as one the state's "fiscally stressed communities" in September. [Read the Town of Evans 2016 audit] Former Supervisor Dash could not be reached for comment Thursday afternoon. But Pordum, who served as town supervisor from 2008 through 2011, said he did not know about deficit problems and issues with past borrowing until his last year in office. He said he kept taxes stable during his term and always spent less than was budgeted. “We did the best we could with what we had,” he said. “That hole was there before I took office. I didn’t know about the bonds.”He also disagreed that he was negligent in the 2012 budget, a charge that was made in Dash’s response to the 2012 audit. Pordum said he and former finance director Katra – now assistant deputy commissioner for the county's Division of Sewerage Management – set up a plan in order to cope with the problem. Board members, which included Keith Dash, who would succeed him as supervisor, were included in budget meetings. "It wouldn't have been easy," he said. “We would have gotten through it. We would have done what needed to be done.” Katra, who served as the town's finance director from 2003 to 2010, called the town's water system the "albatross" that created the town's financial difficulties. He said the town tried to manage the deficit, but delays in the town's plan to transfer its water system to the Erie County Water Authority prevented the town from realizing more revenue. "I always recommended that the budget be properly funded," he said. The 2017 budget provided on the town's website does not highlight the impact of a budget increase on town taxpayers since it does not include prior-year revenue comparisons. It simply states that the tax levy, the overall amount of money the town collects in property taxes, will be $8.2 million. Next year’s overall budget is $15.95 million, up $1.46 million over the 2016 budget. The Erie County Legislature is not required to approve the county's loan, but is required to approve any changes to its investment policies to allow such a loan to occur. That is what the Legislature approved Thursday afternoon. Bryan Fiume, the comptroller's chief of staff, said the county would have preferred to simply advance the town its share of sales tax money for next year. But after spending much of last week working to do that, the Comptroller's Office belatedly discovered that the incoming sales tax money had already been used to secure the loan from Evans Bank. That led the Comptroller's Office to pursue a $980,000 loan to the town backed by future collections of town property taxes, Fiume said. Legislature Chairman John Mills, R-Orchard Park, whose district includes the Town of Evans, said he had no inkling of the town's deep financial troubles and was shocked when he attended the town's public hearing on the budget Nov. 2. "I was blown away by the situation," he said. The State Comptroller's Office must approve the change in county investment policy language in order for the county to transfer money to Evans. Mychajliw said he was hopeful that transfer could occur as soon as Friday or Monday. Brian Butry, a spokesman for the State Comptroller's Office, said that while lawyers must still sign off on the legal language, he didn't foresee problems. "They’ve been working with us throughout the process," Butry said, "so at this point, I don’t think there would be any more additional hurdles they would need to clear." Hosler said she wishes the state had been more proactive in holding the town accountable for keeping its promises to clean up its financial issues after the 2012 audit was done. But Butry said that's not the state comptroller's job -- its the job of the elected officials who oversee the town."They are the ones making the budget decisions in the town," he said. "They are are responsible for the town finances. "He added, however, that the state is willing to work with the town to help it improve its financial planning. Mychajliw also said he offered staff from his office to assist the town. Hosler said she expected to work with both state and county officials to develop a better long-term plan for the town's fiscal stability. In the meantime, she has already frozen spending and laid off part-time employees, she said."We’re cleaning up a lot of things," she said.