WPCNR QUILL & EYESHADE. By John F. Bailey, The CitizeNetReporter and Peter Katz. October 10, 2007 5:33 PM EDT UPDATED WITH PIX: Readers of WPCNR may recall the discussions at recent Common Council meetings regarding the city’s financial future against the background of Mayor Delfino’s request to the council for legislation asking New York State to approve a ½-percent increase in the city’s sales tax. During those discussions, verbal pressure was applied to the Mayor to produce projections of what the city’s financial needs will be. Why does the city need to raise an extra $10 Million in sales taxes by increasing the rate by ½%, it was asked.
At one point, the Mayor stated that he would not provide estimates of what the city planned to offer labor unions for fear of violating New York’s Taylor Law.
Previously, State Assemblyman Adam Bradley, who was asked to spearhead efforts in Albany to have the sales tax increase approved, took the position that without a clear understanding of the city’s needs, it would be hard for him to justify a sales tax increase to the folks in Albany. The Mayor’s recent public position was that he’d provide the numbers after the Common Council acted on his request.
City Projected figures for the State.
WPCNR has learned that financial projections for the city covering the next three fiscal years have already been sent to the state’s Division of the Budget to fulfill a state requirement. These may, or may not, contain the information Bradley and others said they needed. Whether or not the councilpersons, Budget and Management Committee members, and Mr. Bradley were aware of these publicly available projections having been filed, is not known.
A cover letter accompanying the projections, signed by Mayor Delfino, was dated March 30, 2007. It was received in Albany on April 2, 2007. Attached were multi-year revenue projections. The projections were provided to the state as required for city participation in the state’s “Aid and Incentives for Municipalities” (AIM) program. According to the documents, White Plains would receive $5,724,393 from the AIM program during each fiscal year through FY 2010-11.
A copy of the projections which the city sent was furnished to WPCNR by the New York State Division of the Budget in Albany. Note, however, that these are only projections and actual numbers could easily change.
The city General Fund budget is projected to grow from $144.8-million this fiscal year (2007-2008) to $161.3-million in 2010-2011. This is number apparently does not include the Library Fund, Water Fund and Self-Insurance Fund.
21% Property Tax Increase over next three years.
Property taxes are projected to grow 10% in 2008-2009, and 7% each year for the next two fiscal years. However, a footnote explains, “Property Tax increased 10% in fiscal year 2008-2009 to account for two PILOTS returning to the assessment Roll.” Those two properties appear to be “9 West” and “Clayton Park,” which this year are paying $364,270 and $119,750 in PILOTS, respectively. Another footnote states, “Property tax rate increase assumed at 7% each year.” WPCNR points out the use of the term “property tax rate,” meaning the 7% projected annual increases do not refer to the total dollar amounts collected.
The projections indicate better-than-current-inflation increases of city sales taxes, at least in the short term. Present collections are about $43-million. Growth of 5% a year is projected for the next two fiscal years, with growth slowing to 3% in 2010-11, when sales taxes collections are projected to be $48.9-million.
Salary Expense to grow at 5% to 5.5%
On the expense side, the amounts projected to be needed to pay salaries of elected officials (Mayor and Common Council) are projected to grow by 3% a year, as are salaries for commissioners and certain other managerial personnel. The projections indicate that amounts necessary to cover salaries for union employees (police, fire, office workers, sanitation) would grow at 5% and 5.5% during various fiscal years. This may not necessarily mean wages will increase at those levels; it could also reflect increases in the number of employees being paid.
According to a “Multi-Year Financial Projection Summary,” salaries and wages would rise from $70,670,296 in FY 2007-08 to $81,224,937 in FY 2010-11. Employee benefits would rise from $33,312,043 in FY 2007-08 to $39,366,384 in FY 2010-11.
Good News! City Sees Certioraris as Essentially Flat. May Bond for Certs.
The projections going out three years show no reduction in the assessment roll through 2010-11, based on the Allowance for Tax Certs which amounts to $350,000 through FY 2010-11.
However, the city notes in a footnote, “Other Debt proceeds reflects the potential bonding of certain tax certs in fiscal year 2007-2008 and 2008-2009 subject to Common Council approval. This will be done if needed.” The projection also notes “Debt service payments for potential bonding of tax certs included in the event that the financing does occur.”
The category “Debt Service” is projected to almost double over the next three years, growing from $691,944 this year to $1, 279,445 in 2010-2011.
A footnote says, “The City currently has various new revenue initiatives in the development stage that are not included in this Plan.”
In his cover letter, Mayor Delfino writes, in part, “…the City of White Plains has: a.) developed a multi-year financial plan; b.) used the increase in State aid to minimize property tax growth; and c.) documented cost savings initiatives within City operations and through cooperative savings efforts with other municipalities as part of the City’s multi-year financial plan.”
A Balanced Budget Forecast
The Budget Projections are balanced as presented to the state. Any anticipated tax increase could be used to lower property tax or add to fund balance. It is unclear at this time why if these projections are being relied upon, why the city needs the sales tax increase.
A footnote for the state’s information attached to the budgets provides a clue how the sales tax increase might be used: “The City currently has various new revenue initiatives in the development stage that are not included in this Plan. If revenue enhancements are approved, plan will need to be modified accordingly and bonded (SIC) of tax certs will be eliminated.”
Note: It should be noted by readers that the projections referred to in this report were submitted in March of 2007. Conditions are subject to change.
