Nearly halfway into 2011, New York state continues to struggle toward economic recovery.
There have been signs, some subtle, some palpable, indicating optimism and confidence. The jobs picture is getting a bit brighter and gas prices might get a bit cheaper. But for the most part, the rebound has been much slower in coming than many of us had hoped.
This holds true for Westchester as well, despite its image ”“ real or perceived ”“ as being much better off than other parts of the state.
Indeed, Westchester does come out on top in one area ”“ property taxes. Once again, the county has the dubious distinction of being the highest taxed in the nation.
Not a good selling point when looking to attract and retain business.
Timing is everything here, as the county ”“ through public and private initiatives ”“ looks to market itself to a new generation of biotech, health care and other emerging industries.
It”™s time for the state to step in and give Westchester, and all the other counties, a break. This in the form of a property tax cap and relief from those financially toxic unfunded obligations.
But which comes first?
Gov. Andrew Cuomo has proposed a 2 percent cap on property taxes, a move that has been hailed by business groups and Realtors and railed against by school districts and municipalities. The bill has passed in the state Senate, but the Assembly has yet to take a vote on it. It will all come down to Assembly Speaker Sheldon Silver.
If they pass it, will mandate relief come?
Or is mandate reform a mandatory precursor to property tax relief?
It depends on whom you ask.
“We cannot have a property tax cap without mandate relief first,” Chuck Lesnick, president of the Westchester Municipal Officials Association, said in a recent report in the Business Journal.
Lesnick, who is also president of the Yonkers City Council, added that “especially in the wake of the devastating budget cuts from the state” municipal officials say the budget merely shifted funding obligations for education from the state to the municipalities.
Municipalities and school districts make a solid argument. They say they cannot afford a 2 percent cap because of all the unfunded mandates handed down from Albany.
On the other side are those who say cap taxes first and mandate relief will follow.
“We believe strongly that mandate relief has to happen, but I think the only way that you can accomplish mandate relief is by having the cap in place,” Heather Briccetti, acting-president and CEO of The Business Council of New York State, told the Business Journal.
We agree. We will not get mandate relief in New York state unless there is a perceived crisis ”“ in other words, if the school districts tell Albany, “Hey, we”™re broke” ”“ in the form of a tax cap.
If a cap is imposed, it will create an imperative to force state legislators to move on mandate relief for school districts and municipalities.
Otherwise we”™ll just get window dressing, not the serious reform needed in what we believe are three critical areas ”“ pensions, collective bargaining and the Wicks Law.
The Wicks Law needs to be abolished. It is costing governments anywhere from 20 percent to 30 percent more on construction projects.
There also have been calls to repeal the Triborough Amendment to the Taylor Law that deals with collective bargaining. The Taylor Law, or the Public Employees”™ Fair Employment Act, governs the relationship between the state and its workers and goes back to the days of Gov. Nelson Rockefeller.
The Triborough Amendment provides that all of the terms of a union contract that have expired remain in effect until a new contract is negotiated.
This disincentivizes the public labor unions from negotiating a contract.
At the very least it should be modified to provide that only the basic salaries remain in place with no step or other increases.
As for government pensions, there”™s little doubt of the need to stem escalating costs. County, city, town and village governments and school districts outside of New York City paid close to $2 billion in pension costs last year, representing some 7 percent of the property taxes levied by those local entities.
Tinkering with government pensions is a scorching-hot political potato. So why would state legislators move toward pension reform? Why get the unions mad?
They need a compelling reason to act.
We all live under unfunded mandates. We recognize mandates are good political tools to get re-elected. And we have seen the political process at its glacial pace.
Westchester County is at a crossroads. It cannot move forward with economic development efforts ”“ including crucial steps toward jobs creation and business expansion ”“ without a property tax cap in place.
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