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WPCNR MR. AND MRS. AND MS. WHITE PLAINS POLL. April 9, 2009: Well the $160.2 Million 2009-10 City Budget as hammered out by the Mayor’s Office is in. It predicts a $12.4 Million gap between expected revenues and expenses and suggests various remedies for making up that gap. The budget as is calls for a 4.9% city tax increase upping the city property tax of the average White Plains $650,000 to $700,000 home $134, and the tax on the $450,000 home about $110. However, the budget proposes using $12,400 of fund balance to fund expected arbitrated union settlements and revenue shortfalls from parking, mortgage recording taxes and licensing and permit fees, among other shortfalls based on current trends. What the budget does is fund expected union contracts with money it does not expect to receive, and instead uses fund balance to do that.

If city economy does not uplift spectactularly the city will not have the revenue or the fund balance in 2010-11 to pay the expected union settlements, if revenues remain on the current track. The city needs the revenues (projected at $138 Million for 2009-2010  to  rebound beyond the 2007-2008 level of $141 Million ( which saw the zeneith of the White Plains Renaissance and the highest sales tax ever received by White Plains –$45.7Million) in 2010-11 to find that $12.4 Million in fund balance to break even in 2010-11. The city needs at least $155 Million in revenues to balance the 2010-11 Budget if expenses remain at present levels $148 Million, considering inflation. Is this New York State in microcasm?

Well Mr. and Mrs. and Ms. White Plains what would you do? Tell the Common Council what they should do with this year’s budget — how does White Plains avoid going broke in 2010-11?  You decide from the following suggestions:

1: Property Income Tax Increase to Keep Pace with Expenses:  WPCNR projects that to make up the $12.4 Million deficit in the 2009-10 budget, the council could decree a tax increase of 30% which would generate $57 Million on the present city assessment roll of $285.2 Million. It would be good to make the tax increase this year (even though it is an election year), simply because assessments will decline significantly next year — perhaps as high as $10 Million if past trends are an indicator of what the certiorari lawyers have up their sleeves.

So the time to get a big bang on the tax increase buck –is now.  If the $650,000 to $700,000 home in White Plains faced a 30% tax increase it would lift the tax bill in 09-10 beginning in July from $2,724 to $3,700, a $1,000 tax increase. Of course the council could choose to raise half the amount by property tax (increase of 15%) cutting the tax increase on the average home to $500, and raise it elsewhere. What do you think?

2. Commuter Tax– White Plains could slip a tax on persons living outside White Plains who work in White Plains.  The mechanics of this might be explored. This way the residents of White Plains would be spared a significant (see # 1) tax increase.  Should this be explored?

3. Fire Commissioners and Management: The 37  appointed officials in White Plains earn collectively $5,000,000 — should a large portion of  this staff be asked for their resignations — to save money in 09-10 — allowing the new administration to appoint a leaner city administration?

4.  Lease City Institutions: The budget as published suggests leasing city municipal garages, selling property, and WPCNR suggests perhaps privatizing the City Library…at least NOT spending $600,000 on the window replacements. What do you think about leasing the garages (to bring in an estimated $30 Million up front?)

5. Raise Sales Tax Another 1/4%: The Administration has suggested this as a means of raising the approximately $4.5 to 5 Million in money that would conveniently cover the 2009-10 labor settlements. How do Mr. and Ms. White Plains feel about this option raising the sales tax? (The council has tabled this option until May).

6. Surcharge Penalties for Filing Certioraris. A new wave of certiorari filings for the last three tax years is on the way, if this past January is any indication, especially for commerical properties. Should the city enact surcharge for every certiorari filed, as a cost of evaluation of each challenge? Should businesses collectively in the city be charged a percentage of any settlement (to preserve city services of course), and realtors be charged a fee for homeowners filing certioraris. Just a few suggestions. Anyway should some kind of Certiorari Penalty Surcharge on all businesses be explored by the city to replace lost revenues from assessment reductions.  

 

 

WPCNR CITY HALL CIRCUIT. By John F. Bailey. April 7, 2009: The 2009-10 City Budget released last night to the Common Council paints a picture of city cash reserves depleting significantly in less than a year.  Substantial additional revenues, it reports need to be created “through sale of city assets, cost savings and privatizations.”

 

Preserving the fund balance at the current $17.7 Million of reserves, if done by tax increase only have to  raise city property tax by 30%. The 09-10 proposed budget  increases taxes 4.9% but only cuts the budget by .06%

 

Unless city revenues recover significantly  by about $12 Million  in 2009-10, the proposed 2009-10 budget will see the White Plains “rainy day fund,” its fund balance decline to $5.3 Million, according to the budget book. 

The city bank account  stood at $28.4 Million at the close of 2007-2008 at “the height” of the White Plains “Renaissance.” If the revenue projection holds steady,  the city will have only $5.3 Million  in the bank to fund the city payroll increases anticipated in 2010-2011, analysis of the budget indicates, and would be forced to raise taxes by 30% then, pending revenue recovery.

 

The budget says additional revenue sources amounting to $50 Million can be achieved and it expects to achieve them by

 

• Selling additional taxi medallions
  
• Sale of Towing Medallions
  
• Commercial Fire Inspection Fees
  
• Sale of Firehouses 4 (currently headquartering the Police Emergency Services Unit) and Firehouse 5, on  Robertson Avenue in Battle Hill.  Both houses are inactive. 
  
• Establishing an Industrial Development Agency (though Councilman Dennis Power commented Monday evening, that might only generate $2 Million revenue, based on his knowledge of the County IDA.)
  
• Dual residential and commercial property tax rates “to stem the tide of property tax challenges.”
  
• Leasing of 2 parking facilities (Galleria Garage and Library Garage)
  
• Hotel Tax of 3% (sitting in the state legislature, awaiting possible passage)
  
• An additional ¼% sales tax increment.

 

Stimulating a Discussion

 

According to a reading of the city budget,  a copy of which could be acquired only this morning by WPCNR, the city answer to a predicted $10 Million deficit calculated for the current budget year 2008-2009,  is: “While the City will likely finish the 2008-2009 fiscal year with a deficit approaching $10 Million, there are sufficient accumulated financial reserves to absorb this financial shortfall.” In view of that statement, this means the fund balance dips to $17.7 Million going into 2009-10.

 

The budget poses the question that it is up to the Common Council in dialogue with the administration to decide whether this is prudent policy, stating “The following forecasts (of fund balance use) are not absolutes, but are provided to stimulate a constructive discussion of the City’s overall economic position as the Common Council reviews the proposed budget.”

 

The Scenario

 

The city is predicting a $12.4 Million deficit in 2009-10 predicting revenues of $136.1 Million against expenses of $148.5 Million, their answer: decrease the city budget $990,117, even though the City Commissioner of Finance was predicting $4.6 Million in lost revenue a month ago.  

 

The city is raising the property tax 4.9% and that “reflects the amount of revenue that is required to be generated from the City’s assessment roll to balance the City’s budget after all other revenues have been included.”  The city cites loss of assessments to have cost the city $1.3 Million in revenue.

 

Should the revenues not recover in 2009-10, the city is hedging by dedicating $12.4 Million more in fund balance into the budget just in case: “The total appropriation of  fund balance in the proposed fiscal year 2009-10 general fund budget is $12.4 Million…Given the extent of the economic downturn, significant utilization of undesignated fund balance is not surprising.”

 

City Bets Revenues Will Not Be Worse.

 

In order not to touch the fund balance, the revenues projected at $136.1 Million ($44.1 Million in property taxes and $47.3 Million in sales tax plus $17.1 Million in services charges and $9.4 Million in government revenues)  will have to rebound beyond 2007-08 levels ($141 Million).

 

The city is cutting a stated $990, 717  from the 2008-09 budget.

 

Budget not set in Stone: for Discussion.

More Tax Increase Up to Council.

 

The copy in the 2009-10 budget says  the decision of increasing property taxes beyond 5% in the hands of the Common Council.

 

WPCNR predicts that to run a budget that keeps the remaining $17.7 Million fund balance intact by taxes alone, the Common Council needs to authorize an additional  29%  property tax increase.

 

Here’s our Math Lab Report: If you take out the fund balance budgeted for 09-10: $12.4 Million, you have to replace it.  If you do it through the property tax only , you need to raise the city’s projected tax rate of $154.70 per $1,000 of assessed value to $198 per $1,000 of assessed value based on current projections.

 

Tax Increase  would have to push 30% to Make Up the Projected Deficit

 

That impact of preserving fund balance through property tax increases alone would be significant on the $650,000-$700,000 priced home in White Plains. That home’s city tax would go from $2,724 in 2008-09 to $3,658, a $934  property tax increase.  

 

The $400,000 home, assessed at 15,000 would pay $2,303 in city tax under the 4.9% increase proposed by the Mayor’s budget. That same $400,000 home if the council chose to preserve fund balance and pay off the deficit with a tax increase of 30%  at the $198 per $1,000 of assessed value would pay $2,970. a $91 increase.

 

The Mayor’s Budget Book detailed $990,717 in cuts on a $161.6 Million 2008-09 budget.

 

Cuts Proposed Short of $4 Million Goal

 

Those cuts include a $615,392 cut in the city contribution to the Library Operating fund.

 

The city will cut $100,000 of funding to the White Plains Performing Arts Center. It is not clear whether the city will cease paying the operating costs of the center.  (The Center is now scrambling to find sources of funding to keep it performing, according to its  operator,  White Plains Performing Arts Center, Inc. )

 

Over $700,000 of the Mayor’s $990,117 of cut is being born by the Library and the Arts Center. The Mayor is telling the various city departments to reserve 5% of their budgets and not spend it, pending revenue pace in the next year.

 

The $990,117 falls some $3 Million short of the savings the Mayor was asking four in mid-fall.

 

The city uses the fund balance to pay projected union contract raises in the amount of  $6.1 Million in the Reserve for Financing. The city has decided to go to binding arbitration with the police and fire unions, perhaps conceding to a settlement in line with recent settlements around the area, about 3.75% to 4% for 09-10 and 2010-11.