In the introduction to the Mandate Relief Redesign Team”™s preliminary report, chairman Larry Schwartz, senior adviser to Gov. Andrew Cuomo, framed the issue in two sentences:
“For far too long, the relationship between the state and local governments has been a one-way street where mandates are handed down from Albany without care for the impact on local governments or their taxpayers. These mandates, delivered by the state without flexibility or full funding, are a major reason why New York has some of the highest property taxes in America.”
As the debate continues over how to structure mandate relief and the costs associated with some of the key measures now being discussed, two reports have been released that offer suggestions for state Legislators.
The latest comes from Gov. Mario Cuomo”™s Mandate Relief Redesign Team. The 87-page report, released March 1, is the result of more than 500 suggestions from the public and 150 resolutions from local governments.
In December 2010, the New York State Conference of Mayors and Municipal Officials issued a 20-page report titled “You Can”™t Cap What You Can”™t Control,” which covered recommendations of its Mayoral Task Force on mandate and property tax relief. Among the members of the task force were Yonkers Mayor Phil Amicone and Peekskill Mayor Mary Foster.
Both reports offer dire predictions for the state”™s future if it does not gain control of escalating pension and health care costs.
Property tax cap a top priority
Schwartz said in his letter to Cuomo in the report: “We must change this paradigm and stop the train of unfunded mandates in its tracks. The state must be accountable for new mandates and act in partnership with local municipalities and schools. Local governments need decision-making authority and flexibility, not micro-management from Albany. In the long term, and within the state”™s own financial constraints, the state should accept responsibility for funding the existing patchwork of mandates.”
Peter Baynes, executive director of the New York State Conference of Mayors and Municipal Officials, said the fate of the governor”™s 2 percent property tax cap could rely on the progress made in Albany in coming weeks and months on mandate relief.
While Baynes said the property tax cap is a top priority of the Cuomo administration now that the budget has passed, a growing number of state legislators have come to understand that a cap will not work without “significant” mandate relief.
“What it now will come down to is in order for a tax cap to happen, I believe the Legislature and the governor must come to an agreement on a package of mandate relief that is significant and that they can get the political support to pass in the Legislature,” Baynes predicted.
Team suggests amending constitution
The Mandate Relief Redesign Team in its preliminary report issued a number of recommendations, including that the state Legislature pass a law that would provide, with few exceptions, that any new mandate not go into effect unless the state fully funds the cost of it or the local government votes to comply with it. The team said to permanently fix the problem of unfunded mandates, an amendment to the state constitution codifying the state law should be enacted.
The team also suggested the state require an independent cost analysis on any new proposed mandates.
In a section regarding how to control what it termed the “cost drivers” of state mandates, the team proposed the creation of a Pension Tier (6) that would require eligible public employees to contribute more to pension and health care plans. The report estimated the savings for local governments and school districts at approximately $50 billion over a 30-year period.
According to the report, county, city, town and village governments and school districts outside of New York City paid nearly $2 billion in pension costs last year, which represented approximately 7 percent of the property taxes levied by those local entities.
From 2002 to 2012, the report stated, there would be a projected 464 percent increase in public pension costs in New York City or a hike from $1.5 billion to $8.4 billion.
Recommendations on Wicks, wages
The team also called for avoiding the Wicks Law requirement in negotiated Project Labor Agreements (PLAs) with labor unions by eliminating the feasibility study requirement and by promoting regional PLAs instead of agreements on individual projects. Other recommendations included giving local governments greater flexibility to administer existing mandates and having the state conduct a review of all state mandates.
The New York State Conference of Mayors and Municipal Officials report on mandate relief called for some more extraordinary measures, including that the state impose a temporary freeze on public sector (state and local government) wages. It also seeks reforms to the state”™s prevailing wage and civil service laws, including the repeal of the Triborough Amendment.
Baynes, who is also a member of the governor”™s Mandate Relief Redesign Team, said there is concern state legislators will only “tinker” and may not go far enough to make a true impact on the municipal costs involved with state mandates.
“If that is all they do, and they do a tax cap, the financial condition of municipalities (and school districts) across the state will rapidly deteriorate,” he said.
