In the mid-1990s, at the tail end of a severe recession and a time of fiscal crisis, the incoming Pataki Administration, with the consent of the legislature, cut state school aid to New York City while increasing it to other school districts around the state, including those that were far more affluent and spent far more money. During my adulthood nothing any level of government has done has had as great an effect on my family and those of my contemporaries as that decision, and nothing will until our generation does or (more likely ) does not get Social Security. This year, the incoming Spitzer Administration says that we must be “one state.” Even so, Governor Spitzer has proposed eliminating $350 million in municipal aid to New York City, and redirecting it elsewhere. He calls the policy “a major expansion of aid to distressed cities, towns and villages across the state. ‘A resurgence of the Empire State cannot occur without a resurgence of our cities, particularly those in the Upstate region,’ Spitzer said. ‘Investment and jobs will flow only to those areas that are safe and vibrant places to live and work.’” If we are “one state” New York City residents can’t complain about money going where it is most needed, can we?
While state school aid (and STAR aid) allows school districts to provide public education at tax rates they can afford, municipal aid is allows struggling local governments in other categories to provide adequately paid police officers, parks, libraries, and similar services at tax rates they can afford. The $350 million cut will hurt — New York City’s police officers are less well paid than those in the rest of the metro area, particularly to start, the city has a unique local income tax on top of its property taxes, and its parks and libraries have been cutting services for three decades. It also has a 19% poverty rate, far higher than the rest of the state taken together, and its median household income is average at best. And the entire operating budget for the Department of Parks and Recreation is proposed at $250 million next year.
But, in fairness, New York City also has extensive wealth and a large commercial property tax base centered in Manhattan. Balancing everything out, New York City is no longer a distressed place; it is an average place that can stand on its own (especially since it was forced to stand on its own, or worse, when it was distressed). Upstate cities, and some rural tows, now face far more serious problems. Even some older suburbs, as their housing reaches 50 years old (about the point where much of New York City was in the 1960s and 1970s), are experiencing the same growing problems that the city experienced at its worst. And just because the rest of the state imposed a huge reduction in public services and increase in taxes on New York City when it declined in the 1970s, rather than increase cash assistance, doesn’t mean I would want to see the same devastation imposed on suburban areas.
In summary, I don’t object to having my income forcibly redistributed to those worse off than I am, only to those better off than I am. I would prefer that we were all one state, rather than getting some form of restitution for past wrongs now that the party that is primarily supported by the city occupies the Governor’s Mansion. So when first reading the Governor’s remarks, I didn’t object to the cut in aid to New York City. Let Buffalo, Syracuse, Rochester and the country folk get the help they need.
Then I got a look at the list.
State municipal aid, in fact, is not only going to virtually every city, town and village of the state except New York City, it is being increased for virtually every city, town and village except New York City. To where? Let’s just focus on Nassau and Westchester Counties, which might be more familiar to city residents. In Nassau, Oyster Bay town is getting more money, along with Garden City, Great Neck, Roslyn Village, Stewart Manor, Port Washington, Rockville Center, and parts of the “five towns” like Cedarhurst and Lawrence. This is in addition for more money for all the middle class areas of the county on the south shore. In Westchester, Rye (city and town) gets more money, along with Pelham, Eastchester, Cortlandt, Scarsdale and Somers towns and Pelham, Sleepy Hollow, Tarrytown, Pleasantville, Mt. Kisco, Hastings on Hudson, and Briarcliff Manor Villages, and many others. Of course less well off cities and that county, such as Yonkers and Mt. Vernon, are also receiving more aid.
Every municipal and town government in Putnam County gets more aid. Every one in Rockland County gets more aid, except one that loses less than $2,000. Everyone in Joe Bruno’s Rensselaer County gets more aid. And speaking of Upstate, Amherst Town and Williamsville Village, the suburbs that drained Buffalo get more aid, along with Brighton, the suburb that drained Rochester, and Manlius, and Skaneateles, the most prestigious suburb and second home location in the vicinity of Syracuse. Clifton Park, the booming suburb in the Capital District, gets more aid.
We have family and friends in Rockville Center, Somers, Clifton Park, Mahopac, Bayport, Hastings-On-Hudson, Macedon and Webster (Monroe County), Lynbrook, and Massapequa and wish none of those places or people ill. But none has higher overall taxes as a share of income, restricted park and library services, or reduced pay for new public employees like New York City does. None has substantial poverty — many of the first class recreation facilities going up in Clifton Park are supported by fees, but that town doesn’t have to agonize that fee-based facilities will exclude many of its people, like New York City does. All have better schools. Much better. And there is no reason to single out these communities, because almost everyone is getting more state funding, except New York City which is having it taken away.
The affluent communities are getting aid increases of 3 percent, while actually needy places are getting more. But the Governor wants all kinds of “accountability” from places getting the higher level of aid, but none from better off places with just a 3 percent increase. Just as he demands accountability from New York City, which is getting an increase in school aid that is called school aid, but no accountability and no restrictions on spending from other communities, which are getting an increase in school aid called STAR. For those 17 Upstate communities getting the maximum 9 percent increase, says the Governor, “AIM accountability criteria will be expanded. These criteria would require municipalities receiving the largest AIM increases to develop multiyear fiscal performance plans and to use the additional funding to provide property tax relief, support essential economic development investments or fund cost saving technology investments.” I certainly don’t object to that, but what about the others? Can’t they cut costs too?
The budget discussion of support for New York City is also upsetting. It touts the city’s increase in school aid, but as the Governor’s own presentation shows, when back-door STAR aid is included, New York City will be receiving 37% of total state education funding, same as last year, with 37% of public school students and residents who pay 40% or more of state income taxes. (Yet Joe Bruno has denounced this, and the whole budget, as unfairly favoring New York City, and is demanding a worse deal for us.) The budget plan touts tax loophole closers, which will increase both local and state business tax revenues. But this counts as a state benefit for the city a (fully justified) local tax increase on its own businesses, going along with a state tax increase that will be spent elsewhere. You might as well call the entire New York City personal income tax "state aid" (which is pretty much what they did to the increase in that tax after 9/11).
It touts the state pick-up of Family Health Plus costs. But expenditures on Family Health Plus, and nursing homes (for which the state also picks up most of the cost), are concentrated outside the city. So the local taxes we save may be less than the state taxes we pay for Family Health Plus and nursing homes elsewhere. Meanwhile, for all the Medicaid services concentrated in the city, the local share remains 25% — so other communities don’t have to pay as much in state taxes for Medicaid recipients in the city. I was once told by a state official that the fact that NYC’s local share of its Medicaid expenditures is higher than the rest of the state is due to an “adverse population and service distribution.” Let’s not kid ourselves. Whatever the city’s distribution is would have turned out to have been adverse.
The “Impact of the 2007-08 Executive Budget on Local Governments” table shows $2.7 billion in benefits for the whole state, including $1.4 billion for New York City. That’s over half. But the table includes as a state benefit for New York City the local taxes collected by New York City on businesses in New York City, as described above. More importantly, the local government assistance table excludes the $1.5 billion in added STAR tax relief! I can’t find any way to tell how much of that would flow to New York City, other than the briefing book assertion that including both school aid and STAR the percent of education aid to every region of the state would be no different under Spitzer than under Pataki.
The small list of small communities that are also having their municipal aid eliminated is, in its way, as infuriating as the list of those still receiving. Glancing quickly at the 81 “high wealth towns and villages” that “rely on AIM for less than one percent of their local revenues,” I can’t see how their total take last year was more than $3 million altogether. A $350 million cut for New York City, and a $3 million elsewhere. And there is no objective formula, no matter how managed, that would place New York City with Bronxville and Sands Point as places that are better off than all the other communities in the state, including all those listed above. These communities are losing their pittance to make the change in municipal aid seem like something other than it is: nothing for New York City, and more for everyone else, with no other reason behind it.
What is going on here? Is a $350 billion cut a payback for Mayor Bloomberg’s $400 “Son of Star” check, with an assumption that the check won’t be reauthorized (it shouldn’t be) so the city doesn’t need the money? It is intended to be traded for something else later, such as (once again) a lower state of state school aid? Why do the City of New York and its people have to beg for what others, including those better off, are granted, on our dime? Why does New York City have to be “accountable” and “efficient” (a good thing) while other areas of the state pad the payroll and say they need more aid because their taxes are too high? In that sense, this is so much like every other budget I have heard about for the past 20 years. I’m in Governor Spitzer’s corner, but it certainly seems like in order to gain approval for symbols for New York City he is providing money elsewhere.
I’m sick of this and, you know what, I don’t want to beg anymore. Instead, I want the Governor and State Legislature to eliminate the Bloomberg check to offset the $350 million cut. I suppose if that isn’t enough we can cut the libraries from five days a week with short hours to back to two or three. Instead, I have the following request. Drop the deception, and restore the $3 million in municipal aid to the high-wealth towns and villages elsewhere in the state. And spend another $3 million sending a letter to everyone in the state telling the truth about municipal aid this year, and school aid for the past 20 years. Tell them that this year, including front door and back door aid, New York City, despite its concentration of needy children, will be getting just 37% of state education funding, the same as its share of public school children and LESS than the state of state taxes its residents pay. Tell them that for more than 20 years, the city was actually treated far worse than that, and this was one of the main factors in the poor education most New York City children have received. And tell them that in retaliation for New York City getting its pro-rata share of state education funding and nothing more, every community in the state will be getting municipal aid EXCEPT New York City, and that New York City residents and businesses will be taxed to pay for this. If we are one state, can we at least have one truth?