CAPITAL REGION -- Gov. Andrew Cuomo has come up with a plan to make good on the municipal aid cuts he proposed in his 2020 executive state budget -- but it still won't cost the state any money.
In budget amendments announced Friday, Cuomo said he would direct counties across the state to make up for the Aid and Incentives to Municipalities program from additional sales tax money he says they will collect from increased enforcement of sales tax collections on internet commerce.
The initial budget provoked local government outrage, and towns and villages across the Capital Region passed resolutions objecting to the proposed cuts. The budget proposed saving the state $59 million this year by cutting the AIM payments to every town and village that relied on them for less than two percent of their budget -- more than 95 percent of the hundreds of towns and villages in the state.
While those towns and villages would have lost their aid, the governor only proposed freezing at current levels the money that cities like Schenectady, Amsterdam and Saratoga Springs get in municipal aid.
"The original proposal only impacted localities receiving a relatively small amount of money, but I have been contacted by mayors and local officials who say in these tough times it would be a challenge for them," Cuomo said in a statement. "That is why we are revising the executive budget to use internet sales tax revenue to make these impacted localities whole."
The governor was referring to a separate budget provision that would increase enforcement on the collection of sales tax of goods sold over the internet across state lines. Cuomo said that should generate an additional $390 million annually for local governments that collect sales tax, which include counties and a handful of cities.
The New York State Association of Counties, which represents the state's 62 counties, quickly reacted with outrage.
"This is a horrible precedent and unnecessarily shifts the state's burden to local taxpayers who already pay some of the highest taxes in the nation," said NYSAC President Stephen J. Acquario in a prepared statement. "The state could have used its share of Internet sales tax revenue to make municipalities whole.
"Forcing counties to use a portion of their Internet sales tax revenue to reimburse our municipal partners does not help the state reduce property taxes or help to offset the costs of services to our residents," Acquario continued in a Friday statement. "In the end, local homeowners and businesses just keep paying more for decisions made by the state."
The state Association of Towns was also critical.
"Sharing sales tax should be on top of proper state funding," said Gerry Geist, the association's executive director. "This proposal does nothing to reduce property taxes, and takes money out of one hand to pay the other. Rather than supporting this attempt to pit local governments against each other to the detriment of New Yorkers, the Association of Towns continues to call for a full restoration and increase in AIM funding by the state.”
Glenville Supervisor Chris Koetzle, whose town stands to lose $176,000 this year, said he still doesn't see the town getting that money, especially since Schenectady County currently shares only a small percentage of its sales tax. Tax-sharing agreements are negotiated by each county with its municipalities, and they vary widely across the state.
"I would invite the governor to come to Schenectady County and look at the extremely unfair sales tax agreement we have now," Koetzle said. "I don't see the mechanism where he can direct [the counties to pay]."
Since the executive budget was proposed, Cuomo and state Comptroller Thomas P. DiNapoli have announced the state has experienced at additional $2.3 billion revenue shortfall so far this year.