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WPCNR QUILL & EYESHADE. By John F. Bailey. August 5, 2008: The New York State Department of Taxation & Finance reports to WPCNR Wednesday that Westchester County is $3-1/2 Million off its pace for a $473.5 Million sales tax goal midway through the year. The Westchester County Clerk reports County Mortgage Taxes are down 33%, reflecting the 27% dip in housing sales in Westchester County the first six months of the year.

White Plains is Number Two in Sales Tax the first six months of 2008, despite Yonkers having a higher tax rate plus an additional 1%. The Final Quarter of April, May, June figure for White Plains of $11,485,331 was only $355,954 below the Oct-Nov-Dec. holiday period of 2007. Source, New York State Department of Taxation  and Finance. 

The county  has received $235.4 Million in the first six months of 2008 from the state – currently  a little less than 1% off expected sales tax collections of $473.5 Million, indicating a possible $3 Million shortfall in the county budgeted sales tax at this time.  Total shortfall  in sales tax and mortgage tax on the county level at this time, according to the State Department of Budget and Finance: $9 Million.

The Mortgage Tax Dwindles 33%

In light of State Budget Director Laura Anglin’s gloomy prognostications last week, the county may not collect what they expect in sales taxes, and with housing sales off 26.7% % in the first two quarters of this year, mortgage taxes may not make the $28 Million expected in the County budget.

According to housing statistics released by the Westchester-Putnam Multiple Listing Service two weeks ago, housing sales in Westchester County declined 26.7% in the first half of 2008 to 999 sales from 1,363 in the first half of 2007.  There are 4,616 homes on the market as of two weeks ago as opposed to 4,173 the same time last year.  Sales of Condominiums were off 15%; Coops, 23% down, and 2 to 4 family homes down the most, 31% off from a year ago.

County Clerk Troubled

County Clerk Timothy Idoni told WPCNR today the county mortgage tax collection the first six months of this year is down 33%. He said he projects the county to collect $23 Million for the year, and is hopeful for a pickup in sales. The county projected in their 2008 budget to collect $28.7 Million in Mortgage Taxes, indicating the county between the sales tax collection pace and the mortgage tax is running about $12 Million behind on the revenue side on a county budget of $1.778 Billion.

 

White Plains Robust Despite lower sales tax rate.

White Plains  received $22, 703,297 in sales tax receipts the first six months from the state through July 21  –  twice as much sales tax booty as Mt. Vernon and New Rochelle, and $9 Million less than Yonkers.

 Yonkers  received $31.7 Million in sales tax receipts, (thanks to Yonkers enjoying an extra 1% city sales tax – according to the Department of Taxation and Finance– that is not subject to preemption by the county.)

 

 New Rochelle received $13 Million in sales tax receipts back from the state the first six months of 2008 and Mount Vernon $9.1 Million. If you remove the Yonkers extra 1%, White Plains beats Yonkers head to head $22.7 Million to $19M, even with Yonkers collecting ¼ per cent more sales tax at its 8.375%  to White Plains 8.125%.  White Plains had requested to be put on a par with Yonkers sales tax, but this was rejected by city Democrats, who opted only for a ¼% increase in the city sales tax. Now in light of the present budget crisis any increase in White Plains sales tax may not be in the cards.

Soft Sales Tax Statewide.

Statewide, the New York State Department of Taxatation and Finance reports New York state counties received $3.285 Billion back from New York State the first six months of 2008, as opposed to $3.165 Billion the first six months of 2007, an increase in county sales taxes statewide of  4% which is the current 4.2% inflation rate statewide, according to last week’s report by the State Budget Director.

The Department of Taxation and Finance reports that in the first quarter of the state fiscal year the state collected $5.9 Billion in sales tax. The state kept $2.7 Billion and returned the balance to counties and municipalities.

The $2.7 Billion projects out to a state take for 2008-2009 of  $11 Billion in sales tax meaning that the projection for 08-09 after one quarter – according to the Department of the Budget is behind depending of course on how successful the holiday season turns out to be. The Department of Budget projects a sales tax collection for all of 08-09 of $14.6 Billion.

If the state sales tax numbers continue on the present soft pace without the expected kick from the holiday season, the state would collect $11 Billion, leaving a $3.6 Billion shortfall in sales tax revenue alone. But that is only if the holiday season does not supply its usual impact.

The Budget Director, Laura Anglin painted a grim picture last Wednesday  on revenues, which can be seen in their entirety on the Department of the Budget website: http://www.budget.state.ny.us/pubs/enacted/0809_q1_summary/0809FirstQuarterUpdateFinal.pdf

Since Albany legislators have indicated by public comments that they feel this is too soon to evaluate revenue trends and indicative of an early panic on the part of the Governor and Budget Director, it is instructive to examine what their news conference showed, which no other media has reported in depth. The slides below are provided by the state on the above website.

They indicate why Westchester County might expect that more than sales taxes and mortgage tax revenues will be effected in the last five months of the county fiscal year.

·          Falling corporate profits are expected to be off $510 Million this year. New York’s Top Sixteen Banks paid $173 Million in business taxes last year in the First Quarter. This year, they paid $5 Million a decline of 97%

 

 

·         In Sales/Use Taxes, the Budget Director predicted a $161 Million shortfall based on “weaker tax collections than estimated, an adjustment to motor vehicle fees (presumably lower auto  sales)”

 

 

·         Tax Base Growth expected to be 2.6% in 2008-09 is now expected to be 1.6% after First Quarter Figures are in. The Tax Base growth the last two years enabled the state “to solve its budget problems without making hard choices.”

 

 

 

·         Stall in Tax Base Growth has created a Spending Gap the next two fiscal years. Spending is on pace for an 11% growth in 2009-10, while Tax Base is projected to grow just 2%. In 2010-11, spending grows another 8.9% while revenue grows only 4.2%. This is not good.

 

 

·         The total deficit, the Budget Director anticipates is $26.2 Billion through 2011-2012.

 

 

·         13,700 mortgage loans entered the foreclosure process in the first quarter of 2008

 

 

·         As of a month ago 2.2% of mortgages (45,000 owners) were in foreclosure in New York, and increase of 25,000 homeowners in one year.

 

·         The Budget Director noted Wall Street troubles are going to cost the state major revenue for the following reasons

 

 

·         20% of state revenue comes from Wall Street, and the New York Securities Industry has reported 22.8 Billion in losses in the first half of 2008 – read “write-offs.”

 

·         Wall Street is in worse shape than it was in the months following the Trade Center Attack in 2001. In the three quarters following 9/11, the securities industry posted profits. In 2008, however in the first three months of 2008, Wall Street has lost $4 Billion, $16 Billion and $22 Billion.

 

 

·         Wall Street Bonuses will decline this year for the first time since 2002-2003. The last three years Wall Street Bonuse growth averaged 27.6%. The growth will not be there this year to help the state out. Anglin notes “the projected decline in 2009 Wall Street bonuses nearly doubled since (2008) Enacted Budget forecast.” The budget figured an 11.1% decline, instead bonuses appear to be a 20.5% decline

 

 

·         Capital Gains as a revenue steroid are expected to decline 24%. In the last five years capital gains grew 37% annually in 2003,04,05,06, and 07.

 

 

 

 

Westchester County  Executive Andrew Spano  was on vacation last week. The Westchester Department of Communications was asked for a statement on the effect of the state revenue predictions and whether or not county was going to attempt to rein in spending the last five months of the year.  Mr. Spano has not  issued any statement on Governor David A. Patterson’s  and Budget Director Anglin’s dire report on the state revenues last week and their ultimate effect on county spending, at this time.

 

 

 

 

WPCNR THE SUNDAY BAILEY. News Comment By John F. Bailey. August 3, 2008: Those slash and burn charts provided by State Budget Director Laura Anglin in Governor David A. Patterson’s Wednesday news conference  show such a dire prediction for the state’s finances that the newspapers of record chose not to reprint any – another example of “legitimate” media “with superior news judgment supposedly” covering up the big picture of state leadership incompetence.(You can see some of the charts on White Plains Week, our internet telecast at www.whiteplainsweek.com.  Or see the complete presentation at the Department of Budget website.

To the gambling industry Ms. Anglin’s charts are the long-awaited opportunity to create Sodoms and Gomorrah gambling meccas in the far corners of the state.

Think of “Anything Goes Gambling” at Lake Placid (“The Peaks”). Glimmerglass Casino in the Finger Lakes, Fire Island Flames Club on Fire Island, or Manhattan Waters at Battery Park or on the East River. 

Gambling’s  instant ability to suck cash willingly out of taxpayers,  demonstrated most notably at Empire City in Yonkers  may be the fix for the Crash of 08.  It is far easier for our crafty legislators to legalize gambling across the state than to cut spending or raise our taxes, or pass higher commerical property tax rates. They could cut the STAR exemptions again like they did last year without telling us (and neither did “the media,” folks.).They have already demonstrated willingness to slash STAR.

But, wait….here’s an idea. If I’m a legislator, I have to have a gimmick.

The state now needs  gambling, thanks to fifty years of  looting by the legislature.  

The legislators need gambling to avert the necessity of cutbacks in their profligate spending and appalling proliferation of state departments with layers and layers of incompetents, hacks, hangers-on and overpaid bureaucrats — and to keep feeding the bloated school district big spenders.

The precipitous decline of Wall Street bonuses, the wipe out of capital gains charts, worse Wall Street losses than 9-11 are the excuses, as well as the drop in state pension values and high cost of travel provide the excuse to cut major deals with the gambling interests.

“Anything Goes” Casino gambling is  an “Everybody Wins” solution. You can keep up the bloated aid to education. You can increase medicaid payments, fund the out of control pensions.

The success of Empire City in Yonkers has lead to the first of such proliferations in the Catskills – the Empire Resorts-Cappelli Enterprises partnership in reviving the Concord resort, and building a raceway there. This will be the model of many more to come.

Think of how lucrative a casino in Long Island would be on Fire Island, you could call it the Fire Island Flames  – build a hotel  and convention center and you’d draw thousands every weekend from populous Nassau and Suffolk counties — the beginning of Miami Beach on Long Island.

Upstate? Sleepy Lake Placid with a casino on the lake up there would be an ideal draw from Canada, Vermont, and Albany.  Or how about on Lake Champlaign on the New York side? Or how about Manhattan itself  or on City Island – or on one of the virtually unused islands between the Triborough Bridge and the Throgs Neck Bridge. You might even want to turn the bridge tolls into combination toll machines and slot machines – and that is not a joke.

Just this morning, the Times did a story on Steve Wynn, the casino magnate, just finished building a $2.3 Billion casino in Las Vegas. The story makes a point of saying how Las Vegas is hurting somewhat from the downturn.

There is plenty of investment money around from foreign sources to fund these New York goldmines.

The New York State Legislature has already shown the direction that will allow them to continue the decadent New York State Government spending style. Today it’s video gaming terminals, tomorrow it may very well be full-tilt casinos.

I tell you one thing – wide opening gambling in New York will shut down gambling trade shuttling to Vegas and Atlantic City and Connecticut. People could gamble on their lunch hour in Manhattan.

There are millions in New York who buy lottery tickets every day – a response decades ago to the state’s need for money “for education.” They believe in something for nothing. You’ve got a built-in sucker market here.

If I were the state I’d plop three casinos in the New York area: Manhattan, Long Island and Westchester County. You already have one building in the Catskills. Add one in Saratoga Springs or Lake Placid for the northeast and one in the fingerlakes region to attract the Pennsylvania, northeast Ohio market.

Of course, I am not advocating this. I am just thinking the way a legislator thinks.

Along with the casinos comes the ancillary industries of parasites, but casinos provide jobs in regions that have none.  They bring convention centers. They create businesses in regions that need them without huge investment by the state. But most of all they bring legislators’ money you otherwise would not see into state coffers.

In White Plains, casino on Silver Lake would be an excellent thing to get that hideous swamp cleaned up, Silver Lake Casino would be a great idea, don’t you think? Just smell the sales tax, folks!

Or better yet – how about a casino at the Ritz in Tower Two or at 42? Or at those anemicly-assessed, starving properties along Mamaroneck Avenue in “assessment decline?” Certainly would add to the handle on the Mamaroneck Avenue “strip.”

“Anything Goes” Casino gambling in New York would bring in a new era of new bureaucracies (and more hack jobs) in New York for the legislators to hand out. The New York State Hotel & Entertainment Enterprise Commission – that would be good for about 10,000 jobs don’t you think? A New York State Casino Security Force.  

“Anything Goes” Casino Gambling is the easy fix. And, as we all know, legislators in New York always do the easy fix. And, I am trying to think like a legislator does, how can I keep things as they are, increase contributions to my compaign funds, reward my key lobbyist groups, spend more money, and not raise taxes.