City Captains Pass in the Night in a Sea of Financial Icebergs City, Schools Must Cut $1.7 Million apiece for 2015-16 Rebate. City Sales Tax Receipts one third of Inflation over last 10 years

Titanic-redo

WPCNR Quill & Eyeshade. Commentary By John F. Bailey  Originally published May 10, 2006 UPDATED TO TODAY April 14, 2014:

Tonight, 102 years ago, the RMS Titanic was steaming across the iceberg strewn North Atlantic. It had received dire warnings of icebergs in its path, yet it was slicing through the waters at 21 knots (25 miles per hour) on instructions by the White Star Line manager, J. Bruce Ishmay, to set a new transatlantic speed record. An ill-fated quest for the Titanic struck an iceberg 102 years ago tonight and sunk 2 A.M. Tuesday morning 102 years ago

Last  Monday evening, the Mayor of White Plains presented his budget to the Common Council.

Meanwhile, in another part of town… not too far away the interim  Superintendent of Schools Timothy Connors advised the school board it would have to cut $5 Million in three years to qualify White Plains taxpayers for a property tax rebate of 2% that is  part of Governor Andrew Cuomo’s effort to force cities, towns and school districts to trim spending to ease the property taxes on New York State residents.

WPCNR notes last Monday was a missed opportunity for both leaders to call for  a public town meeting of the minds and exchequers, perhaps form another task force to combine portions of their budgets  as they sail on a financial sea afloat with financial icebergs:

The Captains of the two “ships of the city,” the School District Titanic  (because it has the bigger budget and the constituency that cares the most, and the City Hall as the Carpathia (the Titanic rescue ship),  could have taken that public relations (at the very least gesture)  last Monday  night as an opportunity to entertain possible solutions to steering around their twin financial icebergs:

The first iceberg is the city “roll-over-and-play-dead, never-met-a-certiorari-I-didn’t-grant” response to certioraris popular 7 years ago that crippled the city assessibles. Though certs have fallen off due to the long recession, those companies are due to come back and take back more to reflect their assessments the last 8 years. They do it because they can.

The second iceberg is the school district reluctance to trim staff, attack its bureaucracy, and trim the automatic increase they deliver every year minimum in the school budget. Previously up to 2006-07, the district was raising the budget 6 to 7% a year.

Now the recession and the Governor Cuomo tax cap have cut that annual rollover to around 3%. It’s still a lot.

No, the mutual reaching out between the School district and the City of White Plaind did not happen in White Plains last Monday night.

The Mayor and Superintendent met in separate sites in the same city. Much as the Titanic wallowed for two and a half hours before sinking while the ship California, a mere 3 miles away from the Titanic ignored the distress calls, and five other ships within two hours’ sail, passed her by. Only the Carpathia, 40 miles away steamed to Titanic rescue.

Neither Captain of the two city ships seems particularly interested in working seriously to a joint solution to the laissez faire budget trends of either financial ship.

A joint committee of city and community and school representatives wallowed for a year trying to find services that could be consolidated and managed only to save an estimated $75,000 a  year in savings for the school district (on a $184 Million school budget) with the city handling the district vechicle maintenance. The city throws away that money on studies in the blink of an eye when it suits them and pays millions to legal firms.

One City Captain, the Mayor,  does not jawbone businesses who file certioraris, has not explored a quid pro quo that could protect city taxpayers from bleeding certioraris from business.

Before the Bradley-Roach administration took office, In 2006 in the last year of the “Renaissance”  in the city, statements were made that the city  has had 1,000 businesses have come to the city. I did not get a list then from the city.

Realtor Worry about White Plains Exodus

These days businesses are trying to leave White Plains as soon as they can, because the rents are too high. A commerical broker told me last  Wednesday that within the last month, 7 businesses in White Plains csmr to her, seeking to move out of White Plains. That is just one broker.

While the other Captain, the interim Superintendent of Schools, of course will give the helm to a new leader in July  (candidates are going to be presented to the Board this month). It is not his problem to steer the ship.

That new superintendent will be confronted with the need more than ever  to institute an aggressive program to cut school district budget growth because the Governor wants them to.

Both Captains seem to be imitating each others’ spending policies, while feeding taxpayers, human coal into the boilers of their respective city financial engines, burning up senior citizens’ retirement savings, raising taxes inexorably.

The question is when will they run out of coal (taxpayers)?

Now what could be gained by a public meeting of the Mayor and the new Superintendent of Schools? You never know.

Can the Mayor show some numbersmanship to take hold of his budget? It continues to grow unchecked due to blind faith in development falling short of expectations, while the development creates new spending needs that outpace development benefits.

Can a new School Superintendent embark on budget projections and spending cuts in anticipation of city certioraris before rather than after the fact? Could a certiorari “giveback” penalty be enacted by the city fathers to make cert-filers think twice before “cert-ing”?

Could the city, rather than balancing budget  by selling off assets, cut its budget just a tad?

Will the Common Council refuse to give raises to Commissioners this year? Will they demand cuts? Perhaps a more than a token cut might be made?

Cuomo 2nd and 3rd year  2% rebates a big challenge for the leaders who do not have “cut” in their minds

The Common Council goes into its annual show of worrying over the city budget, Wednesday at six P.M in the Mayor’s conference room.

Here’s something they should talk about;

In order to deliver 1% savings on taxes in 2015-16 to generate 2% taxpayer property tax rebates under Governor Cuomo’s tax rebate plan aimed at making local governments responsible for property tax reform (and not the state) , the city must cut spending 1%.

That will be a new trick the Council has not done in only one year,  the 14 years I have covered the city.

Based on the budget Mayor Tom Roach presented last week, he is passing that buck literally to the Common Council to cut  the budget $1.76  Million next year to  qualify residents for the tax cap in 2015-16. If they cut the proposed budget they are taking up Wednesday,. they would get a jump on next year. I would think that would be wise, wouldn’t you?

Maybe they will not have to cut that much, though, maybe some expenses are exempt under the fine print of the Albany legislation. That may be further explained. But even a $1 cut is difficult for this council to make.

The city, though appears to be taking its cue from the School District 25 year traditional habit of spending and the city is playing great catch up ball.

Let’s look at the way it was 8 years ago: the City combined operating budget for 2006-2007 was $146.3 Million. The city budget was growing at 5.2% a year 2% over the inflation rate at that time. It is continuing to double approximately  the inflation rate

According to John Callahan, the City Corporation Council, this is the rate of city growth in taxes the last four years by the tax rate per $1,000 of accessed valuation:

FY 2010-11: $167.82  UP 6.9%

FY 2011-12: $176.11  UP  4.9%

FY 2012-13: $184.47 UP 4.75%

FY 2013-14:  $191.74  UP  3.9%

and last Monday’s FY 2014-15: $196.14  UP 2.3%

This is what happens when you spend more than your revenues and bet on the next big check, borrow for the future against the present.

Meanwhile in the Southend of town…

The School Budget is $100,000 short of a landmark $200 Million a year Budget

It is conceivable that rising expenses will bring additonal budget increases well beyond $200 Million very quickly to keep the School District Titanic steaming ahead with a full compliment of crew .

It is interesting to note that if that happens the budget will go from $165.8 Million this year (2006-2007) to $200 Million in two years.

If the school board continues raising the budget 4% (assuming 1.5% inflation in rising expenses to the district a year,( a conservative estimate), look where the school budget will go in 5 years:

2015-16: $207,896,000

2016-17: $216,211,840

2017-18: $224,860,313

2018-19: $233,854,725

2019-20: $243,208,914

Scary isn’t it?

Interim Superintendent of Schools Timothy Connors in a memo to the School Board last week on the effects of Governor Andrew Cuomo’s “shared services plan,” due from the city and the school district June 1, 2015, wrote:

“For the White Plains School District, the 1% would equal a required savings each of $1,670,627 or $5,011,881 over 3 years.”

That $1.7 Million is very close to what the city has to save  to get you, Mr. and Mrs. White Plains your 2% tax rebates the next three years.

Given the unwillingness to cut spending — a tradition of both the school district and the city administrations– we need an evangelical and patriotic spirit of resolution to slow the two Titanics down.

When both the city and the school district increase spending when revenues are, in the school district case, dwindling, and in the city’s case, not rising as fast as they would like, something or someone has got to give.

Usually it is you and me, the taxpayer. We keep on giving more each year for less. Less performance, less progress, less everything.

Are the financial Captains and the School Board members and Common Council members going to take a look, together?

City and school district financial policy is flooding red ink all over the city books, despite contrived surpluses by counting loans as revenue, by  bonding for doubtful projects, fire sales of land we delay payment for (remember the commuter parking lot we are still owed money for?), and assurances that development will save the day. Maybe development will. It has not so far.

Plugging the monetary gash in the side of the School District Titanic with tax increases, stopgap borrowing, while the Carpathia of the city government steams in circles  instead of coming to the rescue is aggravating the revenue situation for both city and school district.

Both revenue sources are drying up on the city and the school district.

It does not take a Ph.D. or an MBA to figure that out.  Because the Ph.Ds and MBA’s have not figured it out. All you have to do is look at your tax bill.

As a  Mayor of the past was  fond of saying, and some councilpersons and school board members still echo, “it all comes out of the same pocket.” Well it is our pockets. And you keep reaching in for more.

In the future, the city has to find some way to stop the certioraris.

The city has to extract an infrastructure tax of some kind with new development

The school district must cut..

The entire city has to wake up and smell the coffee that development has to be done, but you have to extract a fair amount of taxes out of the developers and commercial taxpayers so the homeowner does not subsidize businesses…which we are.

White Plains economy in slackwater.

A WPCNR review of White Plains City retail sales tax receipts shows that the real increase in city sales tax revenues in ten years is way behind inflation.

The real increase in city development  has only risen $1.6 Million a year since 2002-2003 when the city sales tax collected was $34,413,400  in sales tax

Last Fiscal Year,  2012-13,  the city collected $50 Million in sales tax revenues, $15.6 million  or 45% more than ten years ago — even with sales tax increases.

However the Consumer Price Index in the tri-state metropolitan area according to the Bureau of Labor Statistics has gone up 158% in those ten years.

This I believe is sobering during a period when by inflation alone, if the retail market was being shopped and even with the action generated by the short-lived Renaissance, city sale tax only advanced at a rate  one-third of inflation in the NY-NJ Metropolitan area. That is hard to comprehend.

The city really needs to address this problem of shopper and restaurant-frequenter loss. Either that or the proper amount of sales taxes due is being underpaid or underreimbursed by the state for reasons God knows what. How can the downtown redevelopment White Plains has experienced deliver so little.

Mayors past and present say there is nothing they can do about the certioraris. That is not the answer. Together the two captains should get their ships together soon with the commercial businesses that are creating these financial icebergs because they can. You can hardly blame them.

The question the two captains (city leader and school superintendent to come) have to engage is:

When do the tax increases become too much for the well-meaning and generous White Plains taxpayers to bear? When will the populaces who believe all the city hall and school district hand-wringing and finger-pointing, realize what is happening and why?

Do they care?

As then- Superintendent Connors said Tuesday evening at the Council of Neighborhood Associations back in 2006 , “everything is relative,” noting that the same things were said about the budget twenty years ago.

The only answer is that the people of White Plains simply do not care about competant management. They want to believe the politicians who always claim they are mindful and always say their budgets are lean and barebones, and they are increasing budgets “for the kids.”

It is more comfortable to go to your financial ruin when nice, smart people are saying they are doing all they can.

The alternative that they do not care is unthinkable to comtemplate.

Why update a previously published article?

It shows how the more things are said that things have changed, the more they remain the same.

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