FOR IMMEDIATE RELEASE                                                                                            March 5, 2008

SPANO CALLS FOR MORATORIUM ON STATE MANDATES

County Executive testifies to state Commission on Property Tax Relief

In testimony to a state commission on property taxes, County Executive Andy Spano today called for an immediate moratorium on further unfunded or under funded state mandates to local governments.

“Albany must place a moratorium on unfunded and under-funded mandates that are imposed on counties, schools and local governments,” Spano said in his testimony to the New York State Commission on Property Tax Relief, created by Gov. Spitzer.  “There must be no more new mandates, no expansion of current mandates, no more cost-shifting, and no cuts in state aid for mandated programs.”

“If this Commission wants to achieve sustainable relief for our residents, the process needs a complete overhaul,” Spano said.  The hearing before the commission, chaired by Nassau County Executive Tom Suozzi, took place in Tarrytown.

Spano  recommended a complete overhaul of the system.

What follows is Spano’s complete testimony to the commission. It is also available on line at www.westchestergov.com/news_statebudget.htm

Chairman Suozzi, members of the New York State Commission on Property Tax Relief, thank you for the opportunity to testify before you today.

Ever since 2002, I have been beating the same drum in my State of the County messages. That year I said:

“No elected official likes to raise taxes, but it is happening in counties all around us--- however, one level of government is not raising taxes and that is New York State Government. Why are they able to hold the line? Because they are passing their costs down to us. They create the programs; the counties pay for them. It is time for Albany to assume responsibility for these hidden state taxes by paying for them.”

That was in 2002. Nothing has changed. I find it ironic that I am speaking before the Governor’s Commission on Property Tax Relief when it is the Governor’s proposed budget that is calling for cost shifts that would do the opposite.  I understand that in recent meetings between the Governor’s Office and the Legislature there have been discussions about reversing the cost-shifts contained in the Executive Budget.  While I view this as a positive development, I continue to believe that these cost shifts should never have been proposed in the first place. I also want to commend the members of the Westchester delegation for their advocacy to date to ensure that these cost shifts are not part of the final, adopted budget.

I firmly believe that we will never see permanent long-term local tax relief unless this Commission recommends changes in the way the state partners with its counties, local governments and school districts. Governor Spitzer’s promised change did not occur on “Day One.” If it is to occur on day two, attitudes and policies must be radically different, and this Commission is the ideal vehicle to make that happen.

While I applaud Governor Spitzer for creating the commission, whose mandate is to propose ways to provide property tax relief,  there can be no local property tax relief for Westchester residents unless and until Albany begins to view and treat its school districts and local governments differently.  In difficult times when our state government is faced with large deficits, it needs to tighten its own belt, trim its own costs, and not shift more of the burden to local property taxpayers.

As we all know, counties are creatures of the state. We have to take what that government gives us—or better put, what it doesn’t give us. Governor Cuomo once said, “We are the Family of New York.” So, in your report to the Governor, I hope you will recommend that New York treat its family better. Decisions must be made that help local property taxpayers—not hurt them. And, at the very least, local governments and school district must be included in the decision-making processes.

There must a commitment to solving the systemic problem of unfunded mandates.  “Lowering property taxes by giving local communities relief must be the first priority of state government.”

 By the way, I said that in 2004.

To do this, Albany must place a moratorium on unfunded and under-funded mandates that are imposed on counties, schools and local governments. There must be no more new mandates, no expansion of current mandates, no more cost-shifting, and no cuts in state aid for mandated programs.

If this Commission wants to achieve sustainable relief for our residents, the process needs a complete overhaul. Recommending a cap is a short term fix; this Commission must call for a systemic change in the way state programs are funded and carried out. The state must be willing to pay 100% of the costs of any new or expanded state programs.  With regard to existing mandates, the state makes counties their partner when it comes to sharing in the costs, but it must also make counties their partner when it comes to how these programs are run by giving us input into programmatic decisions and greater administrative flexibility, so that costs can be better managed.

In times like this, Westchester County government tightens its own belt by finding ways to reduce costs, trim expenses, and become more cost efficient and effective.  The one thing we don’t do is shift county costs down to our localities.

This proposed state budget continues and even exacerbates the mandate problem and illustrates why systematic change is needed. Specifically, since 1935, counties and New York State have shared 50/50 the cost of public assistance. The Executive Budget proposes to break this historic family relationship by shifting 2% more to the counties, so the state can pay 2% less. In Westchester this would mean a $2 million increase in local property taxes. This would place a tremendous burden on local taxpayers especially in these difficult economic times. If our state government is going to mandate that the county government pay a majority of the cost, it is the county – not the state – that should have majority control over the decisions on how to carry out that mandate.

Similarly, mandating that counties take over the full expense of youth placed in secure and non-secure detention will cost Westchester residents another $4 million. Previously the state and the counties shared the cost equally.

The proposed cap in the Executive budget for the Preschool Special Education Program would provide a very minimal benefit in the first year and increasing benefits in the out years. I want to thank the Governor for proposing this, but also point out that while the cap would decrease the county share of costs for this program, it would increase costs to school districts. In both instances the funds are coming from the same taxpayers. It is simply a different kind of cost-shift. What kind of tax relief is that? Our residents will still have the same property taxes to pay, just a different entity to pay it to. That is why I believe the Pre-K cap should be modeled after the Medicaid cap, under which the state absorbs all of the above-the-cap costs and takes over administration of the program.

While this Medicaid cap, which we fought for vigorously, has done much to stabilize our budget and prevent double-digit tax increases, it is important to keep in mind that Medicaid is still costing our residents over $195 million this year, a burden no other state in the country places on its local governments. And it is still a state unfunded mandate that we have no control over. Similarly, county taxpayers are paying over $37 million for the preschool special education program. I am not faulting the programs—but I am faulting the way they are funded.

Adding to our tax burden is the fact that our Bee-Line bus system will get $10 million less in STOA aid than Nassau. Now I certainly do not begrudge Mr. Suozzi, my good friend and fellow county executive, for getting this increase---I just want to point out, that since this is a commission for property tax relief, Westchester taxpayers cannot afford to further subsidize our transit system. Not that Nassau should be given less---Westchester should simply get parity. With the critical help of our state delegation, the County is now working to return to parity.

This Commission is vitally important. It is the vehicle through which changes can be made. You have been given a unique opportunity by the Governor to make recommendations that could provide real and lasting property tax relief. I urge you to make mandate reform your top priority. 

Our residents are hurting. The state economy is not getting better, yet state-mandated costs are out of control. My administration is actively working with the Westchester County Association in its study on reducing local property taxes. We are looking at sharing more services and programs both internally and with our communities to save costs. But one thing we would not do in our quest to lower county taxes is to place a greater burden on our cities, towns, villages or schools. In tough fiscal times, our state government must make decisions like families do when there is less disposable income. Families look for savings, they cut down on expenses. They don’t ask friends, relatives or neighbors to pay for what they want to buy.

We must start with a fresh look at state unfunded mandates. This Commission’s work can be successful if it gets the state to rethink how it pays for and how it runs its programs. Only then will our residents see meaningful tax relief. And by the way, I am prepared to work with the Governor and this Commission to ensure these recommendations are implemented immediately.  Thank you.