Friday, August 30, 2019

Unfunded mandates: New York’s license to tax


As someone who regularly touts the importance of civic engagement I admire the social media and letter-writing campaigns of the incredible number of New Yorkers upset with Governor Cuomo’s plan to have our license plates replaced with new ones for a fee of $25. There’s enough pressure from the citizens that maybe it can be turned back. You never know.

While I dig the angry and active efforts of the citizenry I’m not too fond of the same by elected officials of Republican bent who are capitalizing on it from a political standpoint. They are fomenting and using the aggression as a weapon against Cuomo more than against the license plate plan. They don’t care that you’ll be out $25, they care about making their adversary look like a buffoon.

My suggestion to those officials and their constituents following them lock-step is the same as it has always been: Attack the policies, not the man.  And, while you’re at it, attack the policies of that man and countless more before him, regardless of party, who instituted far more egregious plans than that of a once-in-a-blue-moon license plate charge.

All of the action, all of this desire to make things right is better spent – and is never spent -- addressing the real issues. Specifically, I’m talking about New York’s long-standing habit of creating and maintaining unfunded mandates.

Why get mad about $25 that you might not have to throw away again for another decade when those repeating mandates cost you as a homeowner literally hundreds if not thousands of dollars each and every year?

I really can’t remember ever hearing an angry mob upset over them. Yet, they should be!

The state will too often introduce grandiose ideas and not have funding available and/or not pursue statewide initiatives to make it available (that is, spreading and sharing the pain with a higher state sales and income taxes). They claim to show leadership yet wipe their hands of the mess they’ve created and pass it on to others. Implementation and/or financing is imposed upon the counties and school districts, something that does not happen in most states. The counties then have to acquire the revenues from sales taxes and property taxes while the schools drive up their property tax levies.

That is why New Yorkers pay so much more to keep their homes than do people elsewhere. I often cite this example: One of my coworkers pays nearly $7,000 a year in property and school taxes on his home in Niagara County while, in comparison, one of our clients has a nearly-identical home in Tennessee where his bill is around $700 a year.

That sort of differential happens when there are more than 40 state defined and controlled programs funded by the counties that include Medicaid, public assistance for adults and families, child welfare, indigent criminal defense legal service, preschool special education and early-2000s pension sweeteners.

Nearly 80% of county budgets address state and federal unfunded mandates. For 9 major state programs alone, the state’s counties and New York City collect and contribute $12 billion annually to the Albany’s coffers. 

Of them, Medicaid is especially damaging to local budgets and your tax bill. In 1966, property taxes contributed $112 million to state Medicaid funding. This year it’s $7.5 billion. It’s been said that if the state fully funded – and better managed -- its Medicaid obligation homeowners would see their property tax bills cut by 54 to 62%.

School districts accumulate just as many mandates over the course of every several years, whether it’s new training, testing, standardization, reporting, or planning. Education officials will tell you that unfunded state mandates by themselves (not counting federal edicts) make up 16% of the school tax bill.   

With some mandates the state will placate the counties by shuffling money. Like a fixed card game or pyramid scheme, the state will take money from the counties and then send it back in part to pay for some state-mandated initiatives. But, that’s a losing battle: In 2001, the state reimbursed the counties at a rate of 16%; today, that number is 10%.

Realize, too, that not only are you throwing hundreds of dollars at the state every year but with the tax cap in place counties have to cut your local services (roads, bridges, parks, and police) in order to hold up their end of the bargain to the state.

How do we rectify this?

Beyond reforming the funding of existing programs, a start would be to stop the bleeding and make sure nothing more happens.

In every legislative session in recent years bills have been introduced that would ban future state mandates that increase costs on local governments and school districts without providing state funding to pay for delivering the required programs and services.

That’s the way it should have always been. If state officials want to do things, they need to find the way to make it happen, instead of finding scapegoats – the counties, the schools, and, ultimately, the homeowners.

So, I encourage you to get mad about all this and demand change.

Sure, the fireworks over license plates are awesome but there should be more – a lot more – when it comes to unfunded mandates.

$25 once versus $2,500 every year?

Given that perspective, it should be easy to choose your battles and just as easy to get people to join you in the fray.


From the 02 September 2019 Greater Niagara Newspapers and Batavia Daily News

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