County and state call for federal aid
Flynn, Paddock, Palmesano, and NYSAC respond to Gov. Cuomo’s Fiscal Year 2022 budget proposal
Two weeks ago, Governor Andrew Cuomo outlined the fiscal year 2022 New York State Executive Budget, which calls on Washington, D.C. to deliver state and local aid to make up projected shortfalls and continue necessary services.
According to the New York State Association of Counties, county legislatures have pledged to continue working with Cuomo and state and federal lawmakers to urge Washington to provide federal funds for states and local governments, of which they say they are in desperate need.
Cuomo says that without this aid, he will be forced to make dramatic cuts, impacting county budgets, placing new burdens on local taxpayers, and jeopardizing county health and human service programs for the New Yorkers most in need.
Included in the budget presentation materials supplied by the Division of Budget were several key proposals made by the counties in November, including:
• Making local sales tax authority permanent and allowing all counties to go to 4% percent
• Collecting of local sales tax on recreational cannabis transactions
• Reducing the state's withholding of local aid – contingent upon the amount of federal aid
• Reducing the judgement interest rates to the market interest rate.
• Extending the authority to piggyback on contracts for 2 years
• Allowing shared jails between contiguous counties
• Providing flexibility in jail staffing
• Reforming Early Intervention to provide savings and greater flexibility
• Expanding investment options for local governments.
Yates County Treasurer/Administrator Nonie Flynn responded to Cuomo’s proposed budget with concerns.
“There are many facets of the Governor’s budget proposal that are concerning," Flynn said. "First and foremost, to make this budget work, the Governor is relying on the federal government to come through with funding. If that will occur and to what level is a huge unknown. The Governor is still proposing cuts to county funding for mandates over which we have little or no control. The continued diversion of our local sales tax revenues for state purposes is not right. Lastly, the two new programs to increase NYS revenue will most likely increase county expenditures. The first is legalizing the sale of marijuana to adults for recreational purposes. The second is the expansion of mobile sports betting. On the positive side, we are beginning to see the light at the end of the tunnel with the COVID vaccine. Also, our economy has proven itself to be more resilient than we originally predicted when the pandemic first hit.”
“While there are not a lot of details in the governor’s budget,” said Yates County Legislature Chairman Douglas Paddock, “it is encouraging to see state aid reduction change from 20% to 5%, depending on amount received from the federal government. Unfortunately, the 5% reduction in state aid may very well be permanent, but state program demands have not changed."
Paddock added that with the change in power in Washington and with Senate Majority Leader Chuck Schumer being from New York, the chance of federal funds being allocated to state and local governments has improved.
“The pandemic wrought havoc in the state, however, relying on federal aid to balance the state’s budget cannot be a long term strategy,” said Paddock.
“The state is also using a portion of sales tax that should be going to counties to fund state programs,” Paddock added. “An example is AIM (Aid and Incentives to Municipalities) that took approximately $186,000 from Yates County’s sales tax and distributed it among the towns and villages. I fear that the state may look upon this approach as another funding source, instead of dealing with its real issue – excessive spending.
“There will be changes in the state budget proposal over the next couple of months. There is some hope that counties will be treated fairly,” Paddock concluded.
NYSAC President Jack Marren, chairman of the Ontario County Board of Supervisors, agrees, saying, “While this state budget proposal includes plenty of unknowns, especially whether the federal government will provide state and local COVID response funding, we are optimistic that our county leaders can work with state lawmakers to finalize a budget that strengthens our communities and help rebuild our local economies. Our staff of legislative experts at NYSAC will be looking through the budget bills as they become available, and they will report on areas of direct and indirect impact on counties.”
NYSAC Executive Director Stephen J. Acquario said, “This state budget depends on federal funding from Congress and the new administration. Counties, too, have made the case for the over $2 billion in lost county revenues during this COVID-19 pandemic. We are confident that Senate Majority Leader Charles Schumer and New York’s congressional delegation understand the challenges facing our local governments, and they will work in Washington to ensure the passage of a federal stimulus packages that helps states and local governments as we fight to win this war against COVID.”
State Assemblyman Phil Palmesano (R,C,I-Corning) was more pointed in his criticism of Cuomo’s 2021 Executive Budget.
“Our state is facing an unprecedented and challenging fiscal situation due to the economic devastation caused by COVID -19 coupled with the governor’s mandated shutdowns, closures and restrictions," Palmesano said. "We are facing an immediate $15 billion budget deficit and a projected $39 billion budget deficit over the next four years. Unfortunately, instead of laying out a detailed plan to help our state recover, rebuild and move forward, the governor spent most of his time pointing fingers and blame at the federal government. This is not going to address the challenges we face. Although we need, and I support, state and federal aid for state and local governments because of the devastating impact COVID-19 has created, we must be realistic about our expectations and plan and act accordingly. It’s also important to keep in mind that we faced a $6 billion Budget deficit before COVID-19 arrived.
“As I said before and will continue to say and advocate, it is critically important that the governor and Legislature work together to take bold, broad and aggressive action to open up our state’s economy and provide much-needed assistance and relief for the many small businesses, farmers, manufacturers, workers and families who have been crushed by the state-mandated COVID-19 closures, shutdowns and restrictions. Now, more than ever, it is imperative that we work together to take significant action to encourage more economic development and private-sector investment in order to foster more job creation and tax revenues so we can address and fund our state’s important priorities.
“Today, we saw finger-pointing and blame. With so much uncertainty and concern facing families, workers and small businesses across our state, they expect us to work together to make the difficult decisions needed to put forth a fiscally responsible budget so we can, together, move forward, to recover, rebuild and jump-start our economy and state.”
Proposed budget highlights
Cuomo argues in his budget that with adequate federal support, the state can advance his plan “to “rebuild & renew New York,” including:
• $306 billion infrastructure plan - largest in nation
• $29 billion in private and public green economy investments
• $1.3 billion rent relief program, $20 billion to create or preserve 100,000 affordable homes, $128 million for homeless housing & assistance
• $15 cap on broadband for low-income families, $150 million to address food insecurity, $10 million for liberty defense fund
• $130 million pandemic recovery & restoration program supporting highly-impacted small businesses, restaurant, arts & entertainment industries
• $40 million infectious disease resiliency commercialization fund to fast-track innovations & address emerging health threats, and establish a public health corps to assist in supporting COVID-19 vaccination operations, establishing a best-in-the-nation emergency response public health capacity
Cuomo also reiterated his call on federal partners to repeal the State and Local Tax policy -- or SALT cap -- he says cost New Yorkers over $30 billion over the last three years and amounted to the first double taxation in history. The average cost of SALT cap to New York households is $2,600 per home.
"The story of COVID has many chapters - we launched the battle last year and now we must not only finish it, but begin an aggressive post-COVID reconstruction," Cuomo said. "We are in a different time and a different world than just one year ago and we shouldn't be surprised that this budget will look different. We have a plan in place, a strength that we have not had before and I believe our future is bright, but Washington must act fairly if we are to emerge on the other side of this crisis. Despite the federal irresponsibility, which allowed COVID to ambush our state, New Yorkers are ready to begin rebuilding, but for that to happen, we need SALT repealed and $15 billion in rightfully deserved federal aid -- and we need it now. After years of federal hostility, I believe the stars are lined up for that to change -- we just need to do it. We built the greatest state once before and I know that we will do it again."
Highlights of the FY 2022 Executive Budget, assuming $15 billion in federal aid:
• State Operating Funds spending is $103.4 billion
• All Funds spending $192.9 billion for FY 2022
• Provides $31.7 billion in School Aid
• Provides $7.5 billion in state support for higher education in New York