CAPITAL REGION — Towns and villages across the state would see general municipal aid payments – funds they have received for decades – disappear under Gov. Andrew M. Cuomo’s 2020 executive budget proposal.
Glenville would lose $176,465 in state aid under the governor’s plan. Rotterdam would lose more than $173,445, and Niskayuna, $101,675 – money those towns included as revenue in their 2019 budgets.
The losses for Schenectady County’s largest towns are on the high end of losses statewide, but nearly all towns and villages would see the payments disappear. Aid levels are based primarily on population.
“It is definitely going to have a significant impact,” said Glenville Town Supervisor Chris Koetzle, who became aware of the impact on his town late Thursday. “It will mean either cutting services or raising taxes, so there would be an impact on taxpayers.”
The statewide total awarded to towns in 2020 would drop from this year’s $47.9 million to $5.2 million. Total aid to villages would drop from $19.7 million to $3.3 million. The plan eliminates the aid to all towns and villages for whom the state payments amount to less than 2 percent of their budgets, as is the case for the vast majority of towns and villages.
That means most towns, including all five in Schenectady County and all but one in Saratoga County, would see the payments disappear entirely. That could force budget cuts or property tax increases.
“We’re going to have to find ways to curtail expenses,” said Rotterdam Town Supervisor Steven A. Tommasone.
A handful of small towns across the Capital Region, including Mohawk and Minden in Montgomery County, would still get payments, but those payments would be held at the same level as this year. In Fulton County, only the town of Mayfield would keep its aid; in Schoharie County, only Esperance and the town of Cobleskill would not see the payments cut.
Cuomo did not mention the proposed cuts in Tuesday’s State of the State and budget address in Albany, though he did highlight a proposal to make permanent another measure that displeases many local leaders – the 2 percent tax cap on local property tax increases.
Neither change can happen without approval from the state Legislature, and state Sen. George A. Amedore, R-Rotterdam, has already called on Senate leaders to reverse the proposed cuts.
“These cuts will be devastating to towns and villages, many of which have already voted on their budgets for the coming year and rely on this yearly aid to help with operational expenses and to provide much-needed services to their residents,” Amedore wrote in a letter Friday to Majority Leader Andrea Stewart-Cousins and Minority Leader John Flanagan.
Amedore said he wants to see the Aid to Municipalities program (called AIM) restored to this year’s level, and that restoration “remain a top priority for the final enacted budget.” The final budget is due by April 1.
Sen. James Tedisco, R-Glenville, said the proposed cuts disproportionately hurt upstate communities.
“The governor’s budget proposal to take AIM funding from upstate towns and villages that depend on that money for public safety efforts and fixing our dilapidated infrastructure is one of the biggest misfires in a plan that offers very little for upstate taxpayers and to stop the exodus of people from the Empire State,” Tedisco said Friday in a prepared statement.
With word of the proposed cuts spreading this week, the state Association of Towns also spoke out.
“The governor’s proposal will further restrict the essential services provided by towns across our state,” said Association of Towns Executive Director Gerry Geist. “Furthermore, this proposal will likely force municipalities to pierce the tax cap to cover costs associated with the services lost if this proposal becomes law.”
The cuts don’t apply to the CHIPS highway aid program, which will be funded at the same level as this year: $478 million. Municipal aid to cities is also being held flat at $647 million.
For most towns, the anticipated revenue from state aid was included in the 2019 budgets that were adopted by their town boards in November.
“There was no indication they were going to cut this, so it was in the budget,” Koetzle said.
He said Glenville has sufficient reserves to make up for the loss, though he said he opposes the use of the town’s fund balance to cover operating expenses.
The state budget office argues the affected communities have a low reliance on the municipal aid program and that other state programs will help the towns and villages. A separate proposal to collect more sales tax from internet commerce should bring in $400 million, though in most cases, that money goes to county government coffers. (Some counties share revenue with towns.)
“For affected municipalities, AIM is not a significant source of revenue – the typical impact is just 0.65 percent of expenditures,” says the state budget briefing that accompanied the governor’s proposed spending plan. “The affected municipalities have nearly $1.6 billion in reserves, more than 26 times the loss in revenue. They would also continue to be eligible for additional state programs and incentives, including the County-Wide Shared Services Initiative, Local Government Efficiency Grants, and the Citizen Empowerment Tax Credit.”
The village of Ballston Spa, which has had to repeatedly raise property taxes in recent years even as it drained reserves, would lose nearly $42,000, which the village mayor said will inevitably mean services have to be cut.
“That’s going to be a great hole in our budget, and finances are tight now as it already stands,” said Mayor John P. Romano. “I hope they realize the devastating impact it would have. I don’t understand the logic behind it. It’s going to affect everybody.”
Tommasone, in Rotterdam, said cutting expenses is preferable to raising taxes, and he hopes the proposed cuts aren’t a budget negotiating ploy.
“When it’s no fault of the town or of the community, it’s hard to take,” he said.