Tue October 23, 2012
Cuomo offers little help to local budgets
Governor Andrew Cuomo is telling local governments they are on their own when it comes to coping with a recently imposed property tax cap, saying it’s up to county and city government leaders to make the hard choices, and to stop complaining.
Local government leaders have been warning that the 2% property tax cap imposed by Governor Cuomo and the legislature last year will severely squeeze their finances, and that key programs and workers will have to be cut.
The state Association of Counties has predicted a structural budget gap of over $4 billion dollars over the next five years if there are no changes, and some upstate cities are teetering on the verge of bankruptcy. Many are seeking a state bail out or relief from some unfunded state mandates.
Governor Cuomo offered little sympathy to the local governments’ fiscal crises. Cuomo says he had to cope with a $10 billion dollar state budget deficit, and an ongoing weak economy. He says counties and cities will have to deal with their own problems as well.
“That’s called life,” Cuomo said.
When the property tax cap was enacted, Cuomo and the legislature said it was the first leg of a two part plan. After the tax cap was established, lawmakers were to follow up by eliminating some state regulations that local governments are mandated by law to finance.
Governor Cuomo appointed a commission to decide which mandates could be done away with. The commission missed a June reporting date, and no new date has been set.
But the governor, in a lengthy lecture during a press conference, says he’s already granted local governments some significant mandate relief. He says he’s agreed to phase in a takeover of any increases in the local share of the Medicaid health care program that rise beyond 3%, which will be worth $1.5 billion over five years. The governor was reminded by a top aid that he and the legislature approved a new pension tier, so that future workers will receive fewer benefits, saving the state, as well as local governments, billions of dollars in costs in coming decades.
“See, now I’m getting more agitated,” he said. “This was a lot of money.”
Cuomo has been a supporter of government consolidation since his days as the state’s Attorney General, he suggests that more governments will have to merge to save money.
Cuomo says if upstate cities really believe they are “on the brink”, then they should give up their powers of governing to a state- appointed financial control board.
The New York Association of Counties’ Stephen Acquario is disappointed with the governor’s answers.
“If the state wants to enact a law, they should provide the funding,” Acquario said.
Acquario says counties are grateful for what governor Cuomo and the legislature have already done to help with long term health care and pension costs. But he says the savings won’t take effect for some time.
“It’s in three years, it’s in ten years, it’s in fifteen years,” Acquario, who says the stat needs to do more now.
Acquario says the governor needs to be more aggressive in taking on mandates that benefit public worker unions. He cites the Triborough Amendment, which allows old contract agreements to remain in place whenever a new contract cannot be agree upon. Counties, as well as school boards, say the rule is very costly when bargaining talks drag on for years. A top aid to the governor has already said that repealing the Triborough Amendment is unlikely.
Cuomo says there is another option available to local governments. They can override the property tax cap, if 60% of the elected representatives in a county vote to do so. For school districts, 60% of the votes must say yes to an override.
“It’s democracy,” Cuomo said.
But Cuomo says realistically, that’s no longer an option. He says steep property tax increases over the past decades have driven people from the state.
And he says no one should expect any changes from the current fiscal constraints until the national economy significantly improves.