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Cuomo says local governments need to cope with tax cap

Governor Andrew Cuomo is telling local governments they are on their own when it comes to coping with a recently imposed property tax cap, saying it is up to county and city government leaders to make the hard choices, and to stop complaining.Local government leaders have been warning that the 2 percent property tax cap imposed by Cuomo and the legislature last year will severely squeeze their finances, and that key programs and workers will have to be cut.

The New York State Association of Counties has predicted a structural budget gap of more than $4 billion over the next five years if there are no changes, and some upstate cities are teetering on the verge of bankruptcy. Many are seeking a state bailout or relief from some unfunded state mandates.

Cuomo offered little sympathy for the local governments’ fiscal crises.  The governor says he had to cope with a $10 billion state budget deficit, and an ongoing weak economy. He says counties and cities will have to deal with their own problems as well.

“That’s called life,” Cuomo said.

When the property tax cap was enacted, Cuomo and the legislature said it was the first leg of a two part plan. After the tax cap was established, lawmakers were to follow up by eliminating some state regulations that local governments are mandated by law to finance.   

Cuomo appointed a commission to decide which mandates could be done away with. The commission missed a June reporting date, and no new date has been set.  

But the governor, in a lengthy lecture during a press conference, says he has already granted local governments some significant mandate relief. He says he has agreed to phase in a takeover of any increases in the local share of the Medicaid health care program that rise beyond 3 percent, which will be worth $1.5 billion dollars over five years.

The governor was reminded by a top aid that he and the legislature approved a new pension tier, so that future workers will receive fewer benefits, saving the state, as well as local governments, billions of dollars in costs in coming decades.   

“See, now I’m getting more agitated,” he said. “This was a lot of money.”

Cuomo has been a supporter of government consolidation since his days as the state’s attorney general, and he suggests that more governments will have to merge to save money.

The governor says if upstate cities really believe they are “on the brink,” then they should give up their powers of governing to a state- appointed financial control board.

The New York State Association of Counties’ Stephen Acquario is disappointed with the governor’s answers. “If the state wants to enact a law, they should provide the funding,” Acquario said.

Acquario says counties are grateful for what Cuomo and the legislature have already done to help with long-term health care and pension costs.  But he says the savings will not take effect for some time

“It’s in three years, it’s in ten years, it’s in fifteen years,” said Acquario, who believes the state needs to do more now.

Acquario says the governor needs to be more aggressive in taking on mandates that benefit public worker unions. He cites the Triborough Amendment, which allows old contract agreements to remain in place whenever a new contract cannot be agreed upon. Counties, as well as school boards, say the rule is very costly when bargaining talks drag on for years. A top aid to the governor has already said that repealing the Triborough Amendment is unlikely.    

Cuomo says there is another option available to local governments.  They can override the property tax cap if 60 percent of the elected representatives in a county vote to do so.  For school districts, 60 percent of the votes must say yes to an override.

“It’s democracy,” Cuomo said.

But Cuomo says realistically, that is no longer an option. He says steep property tax increases over the past decades have driven people from the state.

And he says no one should expect any changes from the current fiscal constraints until the national economy significantly improves.

Karen DeWitt is Capitol Bureau Chief for New York State Public Radio, a network of 10 public radio stations in New York State. She has covered state government and politics for the network since 1990.