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WPCNR COMMON COUNCIL CHRONICL EXAMINER. By John F. Bailey. April 15, 2009: The Mayor of White Plains and the Common Council President are agreed that the way out of the city revenue shortfall is not through a massive tax increase. The two disagree on how to make up the deficit.
Acting Budget Director, (back to photographer)addressing the Common Council and Budget & Management Advisory Committee Tuesday evening. Cutting,not taxing, was the Common Council mantra.
After a three-hour walk-through of the new budget provided by the Acting Budget Director on the 2009-10 $160.2 Million Proposed City Budget last night at City Hall, Mayor Joseph Delfino, the outgoing Mayor of White Plains, told WPCNR he would not support a 30% Property Tax increase to balance the city’s “fund balance-balanced” budget at current spending and service levels (even though the Mayor has no political stake in the fall election).The Mayor said his administration has created a series of revenue-raising policies, he recommends to the Council to plug the $11 to$12 Million, give-or-take-a-million budget gap.
Benjamin Boykin, Jr., the Common Council President, asked the same question by WPCNR, about raising taxes 30% said “Absolutely not,” saying the answer to avoiding filling the city projected $11.4 Million revenue gap by drawing down fund balance to about $5.5 Million was cutting expenses.
Pay Now? Tax Cut as Revenues Improve?
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 $700,000 home to $500, and raise the balance elsewhere.
Neither Mr. Boykin nor any other member of the Common Council in attendance at the first of a series of raised the issue of police and fire unions and the city in binding arbitration, that at WPCNR’S last information on this situation, was that the city was getting police and fire union approval of an independent arbitratration firm who had been selected by the city.
The head of the city Civil Service Employees Association was observing from the back of the Common Council Chamber.
Sheehan Says…Maybe the unions should be Advised…
The issue of the union arbitration was raised twice by Budget and Management Committee member, Timothy Sheehan. Sheehan suggested that the Council might acquaint the unions with the possibilities that a binding arbitration award in the 3 to 4% increase area could raise wages at the expense of union members losing jobs. Sheehan did not say union positions should be cut, instead he pointed out that this was a danger of a binding agreement presenting to the city and its workers.
Any binding arbitration result is predicted by the Mayor’s office to result in 3% to 4% labor settlements the next two years setting the pattern for the other two unions in the city. In going over expenses in the budget the Council repeatedly expressed doubt on whether the numbers were realistic, worried over whether the deficit would be greater.
WPCNR projected on this week’s White Plains Week television program, which may be viewed on www.whiteplainsweek.com that the city can continue funding a 3%-4% labor settlement across all four unions, continue present level of services, and fund the present budget with a straightforward 30% property tax increase. The tax rate would rise from the Mayor’s budgeted 4.9% $154.70 per $1,000 to $200 per $1,000 of assessed value that would inject the budget with $13 Million in revenues based on the current city assessment, and protect against any further erosion of city revenues.
The city could scale back that tax increase in future years as prosperity and a booming economy returned to the city. Last night, at least two city leaders, Mr. Delfino and Mr. Boykin flat-out rejected the taxing way out of the city revenue shortfall.
Rereading the Budget Book in 30 Pages.
In the first of a series of weekly meetings, (the next is April 21 at 5 P.M. when Parking, Public Safety and Planning Department expenses will be reviewed), Council members grasped at budget-cutting moves out of the blue: Councilperson Malmud wanted to know how much was spent by commissioners attending professional meetings. Mr. Boykin demanded of the Acting Budget Director, David Birdsall, “scenarios” of what 5% salary cuts across Commissioner and appointed employees ranks –not union positions– would save.
The Council raised questions of what was included in the Acting Budget Director’s projections.
Sales Tax Receipts Soft. Sales Down 25%
The Council and Budget and Management Committee meeting in joint session were told sales tax receipts for the third quarter were up 1.8% for the year (projected by WPCNR as being $34,588,645 through March 31, with three months in the fiscal year to go). Paul Wood, the Executive Officer for the Mayor, said when asked the exact figure, said that was a “verbal” from the state.
Tom Roach, the councilman, was a consistent voice for budget cutting, rather than raising another sales tax increase to help cut the deficit in half (by adding another $5.2 Million inh, according to Birdsall), saying, “I and others believe any tax is inflationary.”
Looking at the Record.
In 2007-2008, through the first three quarters of the fiscal year, the city received $33,977,058 in sales tax, without the ¼% increase that went into effect July 1 of 2008.
This means that third quarter city sales tax collections are only project to about $10,225,723, The city had $24,362,922 in the till the first half of this fiscal year as of December 31. The current quarter (if up 1.8% year to year) appears to be down about $1 Million from the third quarter of last year, even with the extra ¼%. Overall that computes to City Sales subject to sales tax, appearing to be down 25% in the third quarter..
In the final quarter of Fiscal Year 2007-2008, the city received $11,485,331 in sales tax without the 1/4% increase now in effect, translating roughly to $600 Million in sales. If that number from last year’s fourth quarter is met, the city will collect $46.1 Million in sales tax for the year.
If retail sales stay at the same level as last year’s 4th quarter, $600 Million, the city will collect about $13,500,000 in the final quarter and collect $48,088,645 for the year, clearing the sales tax target of $47.3 Million forecast in the 2008-2009 budget, and clearing the $47.3 Million budgeted in the 2009-2010 budget.
But, if sales remain soft..
But if the city retail sales stay off 25%, that means only $550,000, 000 in sales level, that computes to a $12,375,000 sales tax handle, creating a sales tax for the year of approximately $46,963,645 – slightly less than the $47.3 Million forecast for this year. There is an outside chance that the $47.3 Million level might not be met.
When the sales tax increase of 1.8% was told the Council, Councilman Glen Hockley took the opportunity to point out the Council failure to request an additional 1/4% last spring when they had the chance. “What it is about is peoples’ jobs and peoples’ services.”
How real are the projections?
The question was raised by Benjamin Boykin about how real projections were, considering the loss of Fortunoff, Circuit City and Filene’s. Paul Wood, the city Executive Officer, offered the information that Best Buy and Raymore & Flanagan, he had been told, were considering leases in the City Center.
Councilpersons Rita Malmud,left,and Benjamin Boykin.
Rita Malmud expressed concern about the reserving a percentage of department expenses not to be spent until later in the year, the budget-labeled “reserve of 5%(about $7.5 Million) of budgeted departmental expenditures providing a buffer for fund balance.” Malmud said she wanted much more detail by department on what expenses made up this 5%. Birdsall said he would provide that. Mr. Boykin suggested why not cut the departments by that amount?
At this point, Commissioner of Planning Susan Habel (above) took the podium from Birdsall and explained that the City Charter provides the basis for executing just this kind of strategy. The council requested a copy of the section of the Charter.
Malmud said previously in this decade the city has been very conservative in its budgeting, and implied that holding departments back from spending money budgeted was something “We’ve never done before.”
Mayor Invites Council to Make the Cuts
The Mayor, who spent parts of the meeting walking about the council chambers, appearing to stretch his legs, as Birdsall painstakingly weaved through the budget, told Mrs. Malmud,
“Then don’t do it. Don’t do it that way.”
Boykin, flailing his arms, said raising his voice, “Why not do it (cut the departments) upfront?”
Pat Austin, a member of the Budget & Management Committee said “expenses must be tight.”
Tom Roach mentioned he has been getting e-mails saying ‘the (tax) increase must be cut…” and later, “there must be cuts in the long term, to put the city in a manageable budget position in future years.”
Mr. Boykin, in being greeted with slide after slide giving general information on how off the revenues were, asked rhetorically, “Are we comfortable with it?”
Rita Malmud wanted more detail from Mr. Birdsall because she wanted some assurance that the revenues were “not just wishful thinking.”
Birdsall said the city, in creating the budget had made “ (revenue and expense) trade-offs based on all potential sources of what’s out there.”
Salaries should be looked at
Austin, the committee member, said salaries constitute 70%of the budget, and asked Mr. Birdsall to “give us scenarios (on job cuts).”
Mr. Roach raised the issue of whether possible arbitrated union salary increases for unions were included in the budget. Birdsall did not specifically say they were or were not, and could not say whether the separate “Reserve for Financing line” budgeted at $6.1 Million for 2009-2010 would cover the full amount of salary increases expected to be paid. He again said he would provide more detail.
Tax Certs– more to come? No Info.
Mr. Boykin raised the question if the city knew how many more tax certioraris were in the pipeline (and presumably, the effect those certs would have on assessment). Birdsall did not have that number, but promised to get it for a future meeting.
Revenue Revivals. Cut Targets.
On the ways the Mayor’s Office said were strategies to raise money to avoid fund balance depletion, again Birdsall did not have the numbers on what sale of firehouses 4 and 5 would bring, but did provide sales figures for the price of new taxi medallions( they plan to sell 30 mediallions at $50,000 apiece, non-transferable, Paul Wood said) and towing medallions ($15,000). Mr. Wood said medallions were being transferred on the open market for prices from $75,000 to $90,000.
Birdsall and Mr. Wood said revenue projections, especially for leasing of city municipal garages would be provided in more detail at a future meeting. Mr. Boykin referred to an April 9 Wall Street Journal article reporting how meter fees had gone up in Chicago after meters had been transferred to a private company. The Mayor, said, “well they simply made a mistake.”
Ms. Malmud and Councilman Dennis Power each expressed interest in the $142,000 in direct costs the city is still providing the White Plains Performing Arts Center in the2009-10 budget. Mr. Wood said he would get details.
Mr. Boykin said he was looking forward to asking “Moroni, (Al, Parking Department Commissioner) why he hired more people.”
Mr. Roach, who discussed the need for cost-cutting cordially with the Mayor, said what was needed was expense “triage,” that the city had to “budget like a real family has to.”
Jim Benerofe, covering for suburbanstreet.com and Don Hughes both recalled that this was the first time in years that the council had raised so many pointed questions during the first presentation of the city budget.
Despite its duration, three hours, the meeting was characterized by the following omissions:
- There were no projections included of what different arbitrated settlements with unions might mean to the city salaries going out through 2010-2011, 2011-2012, and the present budget ability to cover those settlements into the future. (These projections were not asked for, either.)
- There was no specific detail on what real persons had lost their jobs through cuts made to date by the city and specific dollar savings. This has been asked for repeatedly by the media and council members, but was not provided last night.
- No councilperson voluntarily suggested cutting their $36,471salaries which would save the city $218,826 in wages.
- There were no tax increase projections made to show how higherproperty tax increases than 4.9% with varying interplay of revenues might solve the deficit.
- There were no certiorari projections or prognostications from the City Tax Assessor on the impact on the tax roll that another $5 Million drop or perhaps larger $10 Million drop in the assessments would mean to tax payers.
- There were no projections of increased pension fund contributions required in 2010, though Birdsall noted that they could be substantialas much as 50%. (The council requested more on this matter.)
Of interest, Beth Smayda and David Buchwald, unannounced but nominated the City Democratic Committee Nominating Committee for Common Council, were taking notes in the audience. Assemblyman Adam Bradley, announced candidate for Mayor was not in attendance, but perhaps he had a monitor of the proceedings in the audience.
Mr. Sheehan told WPCNR after the meeting that he had been invited by the Republican Party to run for Mayor, but he had not made a decision as of yet.
