SCHENECTADY — City officials are contending the formula used by the state to calculate a funding stream for local governments has left the city at a disadvantage compared with several of their upstate counterparts.
Schenectady receives $171 per capita in Aid and Incentives to Municipalities (AIM) funding.
The number is dwarfed by other localities of equal or lesser population and similar socioeconomic makeup, including Utica, $266, Troy at $248, Rome at $280 and Niagara Falls, $367, said Schenectady City Councilman John Polimeni in a presentation to state representatives earlier this month.
Schenectady is in line to receive $11.2 million in AIM funding this year.
But if Schenectady received the same per-capita level as its counterparts, the city would receive at least $19 million, Polimeni said.
“Schenectady, by far, gets the short end of the stick," Polimeni said. “The question we have to ask is, ‘Why aren’t we getting our fair share of this?’”
AIM has been in the spotlight this winter after Gov. Andrew Cuomo proposed a $59.2 million reduction to villages and towns in order to help close a $2.3 billion budget shortfall, a proposal he has since reversed following opposition from local government.
Polimeni’s concerns are separate, and strike at the funding formula itself — not proposed cuts.
AIM funds are unrestricted, which means localities can use them however they want.
The councilman said an $8 million increase could allow for a 19 percent tax cut for city residents.
Polimeni asked the offices of state Assemblyman Phil Steck, D-Colonie, Angelo Santabarbara, D-Rotterdam, and state Sen. James Tedisco, R-Glenville, to research whether the numbers can be adjusted in the future.
“We believe the AIM system is broken and recalibration is necessary and past due,” said Polimeni.
When asked about the disparity, Steck said, “I have a lot of confidence in John Polimeni’s analysis.”
He continued: “Certainly we would want to work very hard to correct that.”
Any correction, however, would not happen in this budget year, Steck said.
Unrestricted aid to local governments — also known as revenue sharing — dates back to the 1970s.
Since then, the system has undergone several changes as to how funds are allocated, said New York State Conference of Mayors and Municipal Officials (NYCOM) Executive Director Peter Baynes.
“Distress aid” added inequalities into the program over time, he said, which were ultimately baked into the stream now known as AIM, which was created in 2005-06 to consolidate various unrestricted local aid programs.
Additional aid was targeted several years later primarily to distressed upstate municipalities under a formula that provided annual increases ranging from 3 percent to 13.5 percent based on fiscal distress criteria, according to the state Division of Budget.
While the specific formula is unclear, Baynes said, the clout of a city’s state delegation was directly related to how much aid each city received.
“It was determined on a political process based on how much influence a city’s state legislators had at the time,” Baynes said. “There was a political process at a certain point in time that has seen some cities receive aid and not others, and that inequality is now part of the program.”
That viewpoint was echoed by Schenectady Mayor Gary McCarthy, who serves as NYCOM’s president.
“There is no logic to the formula,” he said.
The formula, he said, handicaps the city when it comes to budget planning.
“We continue to be under pressure to allocate our expenses on local residents if we don’t have the state as a full partner,” McCarthy said.
Asked about a connection between funding and the past influence of a city’s legislative delegation, Tedisco said, “No, it’s not my understanding.”
Tedisco said he was unaware of how the formula was historically calculated.
“How they define comparable cities is something we need to do some research on and get some answers on,” he said.
Any future change would have to come from the Democratic majority in the state Senate, he said.
“I think [city officials] have got a case to make,” he said. “If it is individual legislators, let’s step up their game. I’m happy to step up my game to work with them to do it.”
Steck called the premise “an interesting argument," but stopped short of offering a definitive opinion.
Polimeni reiterated the imbalance at a City Council meeting on Monday.
“We’ve gotten some feedback already from our state representatives,” he said.
Asked how the formula was calculated, the state Division of the Budget declined comment, noting the executive budget proposal didn’t propose to change the city’s AIM funding.
A spokesman did not respond when asked again about how the formula was calculated.