The County Perspective
Legislative Priorities Post State Budget Enactment
Testimony
submitted by
the
New York State Association of Counties
To the
Assembly Local Government Committee
Wednesday, April 22, 2015
LOB, Room 838
Stephen J. Acquario, Executive Director
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Assembly Local Government Committee
April 22, 2015 – 11:30 am, LOB Room 838
We want to thank the Legislature and Governor for enacting a 5th
consecutive on time budget. The public appreciates this and so do your
county government partners. We also applaud your efforts in the budget to:
 Reduce future cost increases on counties by accepting the Governor’s
proposal to reform OCFS chargebacks for youth placed in state
facilities;
 Increase state aid for community colleges;
 Restore public health and agriculture programs;
 Increase funding set aside to address harsh winter conditions
impacting local roads and bridges; and
 Create a pool of state grant funds to support the maintenance and
repair of local water and sewer needs.
These are all positive outcomes of the enacted budget, but we still have more
work to do on things that were not completed as part of the budget.
In our role as the administrative arm of the state, counties administer and
fund dozens of state and federal health, human services, public safety, early
learning and development, and indigent defense programs that counties and
local governments across the nation do not support in a similar way.
The resources devoted to each – local needs and state needs – are often in
competition.
For our state to improve its economic standing and competitiveness we
must continue to incrementally change public policies so that local revenues
can be used for local purposes. Having fiscally strong, self-sustaining local
governments that can provide a robust quality of life in our local
communities is a necessary component of ensuring our children will stay
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and thrive in New York, while attracting new economic opportunities for
decades to come.
Reducing costs for local governments is essential to this effort. The State
assumption of the future growth in local Medicaid costs is a shining example
of how mandate relief can work to build stronger local communities. We are
seeing a dramatic slowing in the growth of local property taxes as a result of
the two Medicaid growth caps implemented since 2005. We strongly urge
the Assembly and Senate to continue to reduce the state’s reliance on local
property taxes to support state programs.
In the remaining legislative session counties would like to focus your
attention on several areas critical to counties, local tax payers and the State’s
future.
Bank Settlement Funds
Counties appreciate and support many of the provisions related to the $5.4
billion of bank settlement funds that were authorized for spending in the
recently adopted budget.
However, we believe we missed an opportunity to provide additional
resources for local infrastructure needs with an emphasis on roads, bridges,
culverts, transit and other critical infrastructure. Infrastructure impacts
quality of life, public safety and the movement of goods and services.
We are asking the legislature to also authorize the remaining $600 million
in bank settlement funds that were awarded to the state in March that was
not part of the State Budget.
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A safe and efficient highway infrastructure is necessary for trade, economic
development and revitalization, job creation and retention, schools,
agriculture, businesses, health and hospitals, emergency responders,
tourism, as well the general traveling public.
According to Area Development Magazine’s 29th, the #1 site selection factor
is highway accessibility, rated “very important” or “important” by 88.3
percent of the respondents.
According to the U.S. Highway Administration New York has the 12th worst
road quality and 5th worst bridge quality (bridges rated structurally
deficient or functionally obsolete).
There is clear evidence that there remains a tremendous unmet need in New
York to improve the quality and efficiency of local infrastructure. Locally
owned roads and bridges account for 87 percent of the State’s 110,000 miles
of roadways and 50 percent of the State’s 18,000 bridges.
Enable Health Insurance Collaborations
As local governments continue operating within a State-imposed property
tax cap, and look for ways to collaborate and share services, several
municipalities and counties have been exploring the joint purchase of health
insurance, a cost that has been rising unsustainably, especially for small
local governments with few employees.
NYSAC hereby asks this committee help us (counties) help our local
governments provide lower cost and more effective health insurance plans
for their employees. Currently half of our counties are self-insured. We want
the ability, where there is a request and a need, to allow local governments
to join our plans. This will save property tax dollars, foster shared services
and help localities stay within their caps.
We encourage you to at least let us pilot this idea in one or two of our
counties.
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Circuit Breaker Income Tax Credit
Counties do not support the Governor’s circuit breaker proposal because it
does not reduce actual property taxes paid and it does not address New
York’s highest in the nation property tax burden when we compare
ourselves to other states – especially upstate and on Long Island.
Counties believe the best way to reduce property taxes is to reduce the costs
of state mandates and allow counties to pass through these savings directly
to property tax payers. This would lower property taxes for 4.4 million
homeowners, small businesses and all entities that pay property taxes and
help improve of national standing in regard to property taxes.
The $1.7 billion annual cost to the state for the circuit breaker proposal is
nearly equal to the $2.1 billion counties subject to the property tax cap
spend on Medicaid. Counties could reduce property taxes by $2.1 billion if
the State were to take over local Medicaid costs upstate.
If the Legislature enacts a circuit breaker it must “uncouple” income tax
credits to homeowners with the requirement that municipalities stay within
the property tax cap threshold. In periods of fiscal stress and recession
county government acts as a countercyclical protection against an economic
downturn by bolstering spending on critical human services and economic
opportunity initiatives. Exceeding the tax cap may be essential to address
economic uncertainty. Denying homeowners needed assistance at this time
because of linking income tax credits to maintaining property tax caps
would be counterproductive at the worst possible time.
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Raising the Age of Criminal Responsibility
 NYSAC supports the philosophy and intent of raising the age of
criminal responsibility as long as there is a full and permanent
commitment on the part of the state to create and fund an expanded
juvenile justice system that will rehabilitate these teenagers.
NYSAC is encouraged that the Governor’s Budget proposal pledged to cover
100 percent of all new costs associated with changing the age of criminal
responsibility to avoid the imposition of a new unfunded mandate on
counties.
However, counties remain concerned about the broad implications of this
public policy and how “eligible costs” will ultimately be defined including
costs related to bolstering staff across the board in highly impacted county
departments necessary to support this initiative, managing transportation
costs and necessary legal assistance.
We also want to make sure there is sufficient provider capacity in all areas of
the state to support meaningful services for these youth and their families.
 With a $375 million estimated full annual cost, counties request the
state establish a 100 percent state funded escrow account from which
counties can draw funds to implement this policy. The expected
allowable growth in county tax levies for 2016 will be about $75 million
statewide – there is no way counties will be able to prefund this
program and wait for reimbursement and not have problems with the
tax cap (assuming about half of this new costs will occur in counties
subject to the tax cap).
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Home Rule Authority Existing Local Sales Tax Rates
Counties will need to reauthorize their local sales tax rates this year and we
look forward to the Legislature expediting those requests as we move
through the remainder of the legislative session.
In the future counties still strongly support the concept of allowing local
renewals of existing sales tax rates without state legislative approval. The
Governor and State Senate both endorse this approach.
This would improve government efficiency by removing the need for
duplicative and unnecessary legislative actions at both the local and state
level and provide parity between the 57 counties and New York City, which
was granted this local authority and control in 2009.
We understand some Assembly members believe the current system
provides safeguards in their districts, we will continue to ask the Assembly
to consider this approach on behalf of counties.
Property Tax (Revenue) Cap Reauthorization
Counties do not support a permanent extension of the property tax cap
unless continued mandate relief is provided and certain technical
adjustments are made to address unforeseen consequences of the current
cap, including:
Municipalities should be able to exempt capital debt from the formula, just
as schools are allowed to do. It is not uncommon for a large share of new
county debt to be the result of State requirements. (expanding/upgrading a
jail or courthouse, addressing DEC or federal standards, etc.).
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Increases in PILOT revenue should not be included in the tax cap formula.
One of the major benefits of new development in a community is increased
revenue to improve government services. The current law limits the
constructive utilization of such revenue increases by forcing most new
PILOT revenue to be used to artificially lower property taxes (all of which
pay for the state's costs anyway).
The court ordered expense exemption should be extended to refunds
ordered as a result of tax certiorari proceedings. Because of the way
reserving works under the tax cap law, taxpayers could end up paying for
such refunds twice -- taxpayers would be refunding money to the plaintiff,
then paying that money again into a reserve when the tax levy limit is
recalculated retroactively by the State Comptroller (we believe this is an
unintended consequence of the current law).
Emergency expenditures related to repairing and/or replacing equipment or
public infrastructure that is destroyed by a natural disaster or other
unforeseen event
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