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Fulton: Tax Cap is Okay, but Mandate Relief is Necessary

Fulton city lawmakers recently added their voices to the growing chorus of local governments concerned about plans to limit their ability to raise taxes.

Governor-elect Andrew Cuomo has signaled his support for a property tax cap for all local and school governments.  It would cap tax increases at 2% or the rate of inflation, whichever is lower.  Local governments could institute a higher tax increase only if they hold a referendum on the issue and it receives 60% approval.

“We fully support (the tax cap),” said Mayor Ron Woodward. “However, one of the major goals to achieving that is mandate relief.”

As budgets have gotten tighter, federal and state legislators have forced local governments to pay more of the cost of programs mandated by the state or federal governments.

The New York Conference of Mayors Tuesday released a report on the issue, called “You Can’t Cap What You Can’t Control”, that made the case for tying a property tax cap to relief from expensive state mandates.

The mayors’ group also pushed Tuesday for Cuomo to declare a fiscal emergency and freeze all state and local government salaries for a year, to give local governments a chance to preserve jobs and services while mandate relief is being worked out.

The cost of employees has been rising sharply in recent years.  Some of it is within the control of local governments — such as the pay increases they agree to give in new contracts.  But a large portion of it is out of their control.  Local contributions to the state worker retirement fund have been skyrocketing in recent years.  Local contributions make up the difference when the fund’s investments do poorly, as nearly all investments have done during the recession.

Woodward said those costs alone are driving up the cost of government.  He said an average firefighter cost the city $73,000 last year.  This year, it’s $93,000.

At the same time, the state is coping with its own budget crisis by reducing state aid to local governments and schools.  Fulton’s aid was reduced by $108,000 this year.