Report knocks revenue sharing system

In New York state, there are 279 municipalities called “villages,” which are similar in many ways to
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In New York state, there are 279 municipalities called “villages,” which are similar in many ways to 52 of the state’s municipalities called “cities.”

These municipalities can all be considered “smaller urban centers” because of their population density and services they provide. But despite similarities, cities are receiving more state revenue than villages.

The reason: the outdated designations of city and village.

According to a report issued Wednesday by the state Comptroller’s Office, if the state’s revenue-sharing formulas took into account factors such as population and services provided to residents, Capital Region villages such as Scotia in Schenectady County, Canajoharie in Montgomery County, Cobleskill in Schoharie County and Ballston Spa and Waterford in Saratoga County would receive significantly more dollars in state assistance.

Revenue sharing, along with other forms of aid to local governments, is distributed based on a 50-year-old formula, one the state Comptroller’s Office suggests “needs a complete overhaul to ensure localities are getting their fair share.”

In the report, large villages and small cities were regrouped into a different classification and designated “smaller urban center clusters.”

They all provide many of the same services — police and fire protection, libraries, water, sewer and refuse collection.

When placing cities and villages with similar characteristics into the same category, the state Comptroller’s Office calculated that villages would receive more money.

According to the report, a “truly functional revenue-sharing program” would be providing $44,729 more money to Scotia. Canajoharie, Fort Plain and St. Johnsville in Montgomery County would receive increases of $14,000, $13,488 and $12,038, respectively, for the 2007-08 year.

Area mayors say their villages are playing the same role as cities, but they describe a difficult time making ends meet under the current system.

“At times, there has been talk about trying to get Scotia called a small city just for that reason,” that village’s mayor, Kris Kastberg, said Wednesday.

Doing so is complicated, requiring a change in the village’s charter, Kastberg said.

Another complication, he said, is the fact that giving more money to Scotia means taking money away from other municipalities.

“At times, you get resistance to that,” Kastberg said.

The village can’t expand in size, Kastberg said, so its tax base remains relatively static.

To increase services, the village has to increase taxes.

Also, Kastberg said, state requirements hinder efforts to save money.

The village could save money by reducing its work force, but then projects would have to be assigned to contractors.

The state is now requiring workers be paid prevailing wage on municipal projects, which spikes the cost, Kastberg said.

“You’re between a rock and a hard place,” Kastberg said.

“We certainly could use some relief somehow    for a small village like us, it’s kind of a closed ecosystem. It’s difficult,” Kastberg said.

Canajoharie Mayor Leigh Fuller said he believes the difference between village and city was always related to population, but he said it costs just as much to serve the needs of villagers as it does for city residents.

“We do put out a tremendous amount of services in our little village,” Fuller said.

Canajoharie has public works and police departments, sewer and water services and ensures trash is collected weekly, Fuller said.

“It’s something that the [residents] are at ease with,” Fuller said. “They like their garbage picked up on time on a certain day, and they like their water mains repaired. We all have the same problems I think” of a city.

“I can see where the ratio would be off some, but really, our needs are just as big per capita as someone that lives in Schenectady or Albany,” Fuller said.

Fort Plain Mayor Guy Barton said that aside from population, he believes there is little difference between cities and villages.

“Everything in the city we can offer in the village of Fort Plain. I feel this new formula is a fair way of doing it, and it would be a benefit to the village of Fort Plain. We’d certainly appreciate that additional money because every penny counts here,” Barton said.

Though the state is recognizing the arbitrary nature of distributing aid and incentive to municipalities, it’s a tough time to address the issue, said Sen. Hugh Farley, R-Niskayuna.

Farley noted that the state has sought to help municipalities by encouraging consolidation and joint offering of services. Consolidation is an attractive way to achieve savings while maintaining or improving services, he said.

One dynamic that’s made state aid so critical for cities is the flight of people to suburbs, Farley said. This leaves cities in greater need of help, he said.

“And the towns and villages have been left to fend for themselves,” Farley said.

“It’s something we’re concerned with. The Senate majority is very concerned about the towns and the villages because most of those are in our districts,” Farley said.

The difficult part, at a time when the state and the nation are facing fiscal challenges, is deciding where to get the money to correct the inequity, Farley said. Struggling cities can’t afford to lose their funding steams, he said.

“It’s a real problem, but it’s something we’re aware of and it’s something we’ve got to try to address,” Farley said.

Categories: Schenectady County

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