Municipal aid cut would be unfair
If this was a year of financial hardship all around, when it was obvious every level of government has to tighten its belt, then New York Gov. Andrew Cuomo might be justified in cutting unrestricted state aid to most towns and villages in his 2019-20 budget proposal.
He might also be justified if he was proposing that the state reduce spending and taxes overall, perhaps in an effort to keep New Yorkers from moving to other states.
Likewise, perhaps, if this cut would save on mammoth amount of money that local governments wouldn’t miss much but would make a huge difference for important state projects.
But none of those is the case. This isn’t a lean year, the governor is proposing a bunch of expensive new endeavors, and this cut to the Aid and Incentives for Municipalities program would save less than $60 million. That’s much less, for instance, than the $80 million in construction capital he plans to give the Olympic Regional Development Authority in Lake Placid to continue upgrading winter sports venues for competition and tourism.
This AIM cut follows a long pattern of Cuomo going after local governments, blaming them for New York’s high taxes and yet making them do expensive new things on their own dime.
This may be a bargaining chip. These municipal leaders will rally their state representatives to demand Cuomo restore AIM funding, and then he will get to ask for something in return. It’s crafty, but it’s also lousy to use towns and villages like hostages.
Also, the way the Cuomo administration went about this seems somewhat crude.
AIM would remain the same as last year for towns and villages that rely on it for 2 percent or more of their annual budgets. That’s good, but it doesn’t seem fair that one town with just under 2 percent reliance would lose its aid entirely while another just over 2 percent would keep its entire amount.
That would create a two-class system, which could be problematic in future years: A few municipalities would get lots of state aid, but most would get none. People would quickly forget why that injustice came about, and they would be ticked.
And it is definitely unfair that villages’ AIM reliance was calculated using budgets that include water, sewer and electrical utilities. Those utilities rely entirely on user fees, not taxes or AIM; the Division of Budget should have used only general funds and other funds AIM can be used for. Leaving those utilities out of the calculation would put the village of Tupper Lake, at least, above the 2 percent threshold and let it keep $72,000 in AIM — more than the cost of an employee with pay and benefits for a year.
For many towns and villages, the pain of losing AIM wouldn’t put too much of a dent in their budgets, often 1 percent or less. But that is still 1 percent more that would have to come from property taxes rather than income taxes — and income tax is generally more fair because it is more based on ability to pay.
If Cuomo and the Legislature really want to cut municipal aid, why don’t they lead by example and try cutting the state budget by 1 percent or so? Until then, the Assembly and Senate should make sure AIM is fully funded.