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WPCNR NEWS & COMMENT. By John F. Bailey. December 30, 2012:
Well, fasten your seatbelts, as Bob Murphy used to say.
Here we go in free fall, for the city, its school district, and Westchester County have already gone over the fiscal cliff.
Like congress a few years ago, they built this cliff themselves.
The city, the city school district, and Westchester County have lost control of their destiny. Not knowing the meaning of the word cut, all three have put themselves in vulnerable financial positions at a time when help is not on the way. We are not talking disaster aid, either.
It makes no difference whether our incompetent representatives in Washington come to a compromise or not within the next 24 hours.
Here is what the city and the school district, and the county have to look forward to in 2013 and what the White Plains resident can look forward to if the city does not execute responsibly:
· A dwindling tax base. Westchester County has informed the city of White Plains they can expect a 6.07% cut in their share of county taxes in 2016. This has been prematurely ballyhooed by some media as a tax cut. But, this “tax cut” will only come true if the White Plains assessment roll stays the same. If the roll declines for the fifth straight year, or the $2.6 Million the roll declined this year, there will not be a 6% tax cut in your county tax bill. There will be a 5% increase in your city tax rate to cover the county tax.
· Soft Sales Tax Revenues. The city is now off 4.5% in sales tax revenues, and crossing its fingers they hit $5 Million in sales tax receipts in December to hold the shortfall where it is. If December figures are off, the city will have to make up that difference with more tax increase piled on top of that 5%. The revenues are not looking pretty at the halfway point of the city’s fiscal year.
· Financial Crisis in the School District. The crisis will be triggered if the above ominous trend in the assessment roll comes true. There is no reason to suspect that the assessment roll will stay at this year’s level with more certiorari settlements with businesses and homeowners to come. The School District will have to raise their tax rate in addition to the city tax rate increase to catch up with the
· The Assessment Crisis Continues. The city government is the least affected by the assessment roll. But, the school district will be devastated again. Another assessment roll will aggravate a budget that faces at least a 7% increase in school taxes because of the pension increases the school district is facing, a 1.1% increase in debt service from its new $48 Million bond, and the 2.5% step increases the district was not expecting to have to pay in 2012-13—brought on by the teacher association rejection of an expected contract settlement.
The district still has to negotiate that contract or face fact-finding, arbitration and worse,in face of a rising inflation rate. To avoid around a 8% tax increase they may be faced with taking savings by laying off some full-time teachers or teaching assistants, who will be the newest teachers hired. It is not a pretty picture.
Failure to cut the school budget this year in 2012-13 (raising your tax 3.01% because they could), is forcing the district into a pretty hefty school tax increase in 2013-14.
City Scramble for Development. WPCNR has learned that two new projects will soon be presented to the Common Council. There is one for the former Sholz Buick property at the intersection of South Lexington and Post Road. The other is a project for one of the office parks on Westchester Avenue, the first under the new mixed use ordinance approved to stop the bleeding property values of office park owners east on Westchester Avenue.
You can bet that any project will be approved by the city to get the assessment roll into recovery in about three years – maybe. The last three years development in the city has stood still. Now finally it may be moving, but it’s not going to keep up with the inexorable march of the certiorari refunds. Business owners are already coming back for second rounds of refunds thanks to the poor economy.
FASNY Approval. I would think that no matter how much the South End of town protests against The French American School of New York project on the defunct Ridgeway Country Club, that the city will have to approve it.
They need the development public relations that approval of this project will generate. If the Council rejects it, if you were a developer would you purchase a large tract in White Plains and go through what the city is putting FASNY through? If the Recreation District Ordinance affecting golf courses is not tweaked by the Planning Department and not resubmitted, that would be an indication to this reporter that the roadblocks put up by the Common Council in response to this proposal are in the process of coming down.
Detox Center Approval. This will be interesting. This is another project that should produce revenues for the city coffers. I’d expect it to be approved, despite the very reasonable objections to it by the neighborhood.
Labor Contracts. The city has problems with the police and fire unions and binding arbitration is going to solve those. The city should cross their fingers that inflation does not glide over 3% otherwise they have big problems. With dwindling sales tax revenues, the fund balance cushion will be hard-pressed to meet a 3%-3% dictated settlement, then the city has to negotiate again on the 2013-14 year. What a mess.
Winbrook Limbo . Ground has not been broken on the first building of the Winbrook rebirth project so much lauded just 4 years ago. It’s been funded (at least the first floor of the first building). Had the city managed this whole project better, something might be happening now. Instead the project, its residents, are in limbo, waiting on HUD and Washington for funding. The huge parcel is in limbo, locked into a never-never-land project. Hopefully the masterminds in city hall and the Housing Authority have a blockbuster announcement to make that billions are on the way. That would be welcome.
Development of Downtown with Vision. The next two years the Roach administration needs to show some initiative in developing the Metro-North Plaza and work in tandem with the County and the state so they do not screw it up and take 10 years to do it.
They don’t have to even touch the station, just fix the bus station, the parking, and the plaza where traffic is a mess every rush hour. (The Traffic Commission has been alerted to this by this website and my television show a number of times, and do nothing to straighten out the perpetual traffic jam during rush hours in the city. Hopefully the new Planning Commissioner can put a magic touch on this blighted transit hub – if only the envisioned Bus Rapid Transit system does not screw development potential up. The Roach administration has to be pro-active with the transit nuts on the Tappan Zee task force and not let White Plains downtown be sacrificed on the altar of rapid transit.
The administration is concentrating on marching development of housing and alternative uses out Westchester Avenue but the inner downtown has to be massaged it has stalled out like Providence, Rhode Island. Perhaps the new Commissioner of Planning and BID can pull together the mishmash of the downtown as it now exists and get some districts going—financial-entertainment-park/rec. The downtown thanks to the downtown drinking district is holding its own but losing lustre – the new Planning Commissioner faces a growth problem that is the challenge of her career.
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