WPCNR COUNTY CLARION-LEDGER. From Westchester County Department of Communications. (Edited) October 2, 2002: Explosive costs of state-mandated programs are forcing a 31 percent increase in county property taxes next year, County Executive Andy Spano said today as he released the 2003 budget for state-mandated programs – which he dubbed “The Albany Property Tax Increase Budget.”
Spano: Albany Mandates to Blame.
From Medicaid to services for children with disabilities, from railroad station maintenance to corrections to pension costs — the costs of these state-imposed programs are soaring, collectively expected to eat up more than $626 million in county property tax and sales tax revenue next year. The increase alone is expected to exceed $111 million next year.
“Every penny we collect in property taxes — as well as all of our surplus and almost half the money we collect in sales tax — goes to pay for programs that the state requires county taxpayers to fund,” said Spano. “We pay for these programs, yet have no way to control their costs. That’s why this is a tax increase from the state of New York to the people of Westchester.”
$800 MILLION SHORTFALL
Taxes collected by Westchester County represent between 15-20 percent of a property owner’s full tax bill. The rest are set by school districts, local governments and special districts. While Westchester government collects the county tax, all the money goes to pay for state-mandated programs and services.
Westchester County will spend $1.01 billion on programs and services required by the state next year; of this, the state will reimburse the county just $213.4 million.
Mandate Funding Chews Up County Services
“Contrary to what many think, county property tax dollars do not pay for such county services as our parks, public safety and emergency services, cultural arts, or domestic violence programs. Our property tax dollars do not pay for senior programs, health centers, or the Bee-line bus system,” said Spano. “These county services are paid for with the remaining sales tax revenue and fees we collect. And as the costs of the state-imposed programs increase, we are left with less and less money to pay for these important county programs.”
1% Sales Tax Increase Requested
Spano reiterated his call for the state to give Westchester authority to raise the county’s sales tax a penny on the dollar, saying it would drastically reduce or even eliminate the Albany Property Tax increase.
“So far, Albany has yet to act and time is running out. State lawmakers have the power to reduce your property tax burden. They have the power to pass legislation to allow an increase of Westchester’s sales tax. They have done this for other counties; we have asked them to treat us no differently. It’s inexplicable that they will not help solve the problem that they created.”
A History of Burgeoning Costs of Mandated programs and no relief
Spano added, “Westchester is not alone with this problem. From 1999-2003, Medicaid costs alone will have increased 50 percent in Nassau, Suffolk and Westchester — a total of almost $175 million. And by 2006, the projected increase for the three counties could total as much as $330 million. Here in Westchester, of every two dollars collected from county property taxes, almost $1 goes to pay Medicaid costs.”
“In reality, the mandatory portion of the budget – and the tax required to pay for these programs – is a New York State tax. Unfortunately, it’s the people of Westchester who have to foot the bill,” Spano said. “And they cannot afford it.”
Budget Coming November 15
On Nov. 15, Spano will release his budget for the programs that the county can directly control. It will be called the County Controlled Budget. It will require no county property taxes.
“For decades, Westchester’s county executives — Democrat and Republican alike — have protested the state practice of creating new programs and then forcing the local taxpayers to bear some or all of the burden of paying for them,” Spano said, “But these protests have gotten nowhere. In the meantime, the actual dollar amount of these mandates has grown exponentially.”
Spano Follow-Up to Tuesday’s “Mandate Moratorium”
Frustrated, Spano, who is also president of the New York State County Executives Association, has helped initiate a statewide effort to send a message to Albany that this practice has got to stop. On Tuesday, he unveiled his “Compact to Protect County Property Taxpayers,” which calls upon all candidates for statewide office as well as candidates from Westchester for the state Assembly or State Senate to agree to a pledge not to initiate any new mandated programs.
EXAMPLES OF SOME OF THE MANDATES AND THEIR PROJECTED COST FOR 2003:
• Medicaid : $170.7 million in 2002; $207 million projected in 2003.
• Other Social Services: $17.1 million in 2002; $23.8 million projected in 2003.
• Services for children with disabilities: $42.2 million in 2002; $48.1 million projected in 2003.
• Courthouse: $9 million in 2002; $9.4 million projected in 2003.
• Probation : $11.6 million in 2002; $11.6 million projected in 2003.
• Paratransit: $4.4 million in 2002; $5.7 million projected in 2003.
• Basic Retirement expenditures (excluding early retirement) : $6.4 million in 2002; $18.6 million projected in 2003
• Corrections: $89.8 million in 2002; $93.8 million projected in 2003.
• MTA: $21.8 million; $21.9 million projected in 2003.
EXAMPLES OF WHAT’S HAPPENING ELSEWHERE IN NY STATE
• Nassau County is facing a 19.4 percent tax increase to close an $18 million deficit by the end of the 2002 — $5.5 million of that deficit is due to increased Medicaid costs. To pay for this, the county is considering a quarter percent sales tax increase and a tax on home heating fuel, real estate transfers and tobacco. County programs have been frozen and 1,400 jobs already eliminated.
• Suffolk County is predicting a $73 million budget deficit for 2003 and facing a 6.6 percent increase in its tax levy for the eastern county and an increase as well for the rest of the county. Medicaid costs were $211 million in 2002 and are expected to increase to $231 million in 2003. Suffolk raised its sales tax a quarter percent and is considering raising fees and re-imposing a sales tax on clothing.
• New York City spends $27 billion, or 65 percent of its budget on state-mandated programs. New York City had a budget gap of $5 billion for its fiscal year that ended in July, largely caused by recent state budget actions. Mayor Bloomberg this week for the first time said he might have to raise city property taxes or income taxes to offset the soaring deficit for the current fiscal year. City agencies have been asked to make 7.5 percent across-the-board budget cuts, including the police and fire departments.
• Albany County expects Medicaid costs to increase by 12 percent, or $6.4 million, in 2003. In 1995 Medicaid cost Albany County taxpayers $33 million. In 2002 Medicaid costs have risen to $60 million. Albany County also predicts it will have to spend at least $2.2 million more to pay for the expansion of the state’s PINS (Persons In Need of Supervision) program for troubled teenagers next year. In 2003, the county faces a $32 million budget gap.
• Tompkins County’s (Ithaca- Central NY) area proposed 2003 budget requires a 21 percent increase in its property tax levy and a 20 percent reduction in services. In addition, the county legislature wants to impose a higher personal income tax on people who earn more than $100,000 annually.
• Allegany County (South of Buffalo, western NY State) property taxpayers are facing a 29.7 percent increase on their county taxes. The county is considering a sales tax proposal.
• Broome County’s (Binghampton area) County Executive Jeffrey Kraham dropped a bombshell on taxpayers, saying the sales tax would have to jump from 8 percent to 9 – the highest in the state — or county property taxes would have to increase by 35 percent.
The Spano Doctrine: 1% Sales Tax Increase Eliminates Tax Increase
Spano is asking all candidates for statewide office as well as the candidates for state Assembly and Senate from Westchester to sign his compact to cap the costs to counties of state-required programs.
While those steps if enacted could help Westchester in the future, Spano said the state Legislature and the governor have the power to help the county now by giving the county the authority to raise its sales tax one penny on the dollar.
As previously proposed by Spano, the increase – affecting all localities except Yonkers, Mount Vernon, New Rochelle and White Plains, which already have their own sales tax – would raise $110 million. This would virtually eliminate the need for a property tax increase. If part of this revenue is used to hold down local town, village and school taxes, the property tax increase would be 8.2 percent.
“In short, one penny saves many millions,” said Spano. Presently, the municipalities that would be affected by the proposed penny sales tax increase have the lowest total sales tax of any place in New York State: 6.75 percent.
Other counties which have already increased their sales tax to pay for state-imposed programs are Chemung, Chenango, Rockland, Seneca, Ulster and Suffolk. Many more are considering taking such actions.