WPCNR CITY HALL CIRCUIT. By John F. Bailey. October 11, 2007: Mayor Joseph Delfino yesterday sent a letter to Assemblypersons Adam Bradley (89th District) and Amy Paulin (88th District) with a copy of the projections of the White Plains City Budget through 2011, as reported by WPCNR yesterday.

In the letter, the Mayor says he does not endorse the budget, saying it is a projection only, subject to the vagaries of fate,  and does not endorse the salary increases forecast in the budget projections, saying he cannot vouch for their accuracy, and he will not violate the Taylor Act governing negotiations with public employees. The Mayor says the budget is a projection only and indicates that the one-shot financial additons put in the budget are not guaranteed, and again makes the case for  the 1/2% sales tax increase home rule request he is requesting either of the two legislators to introduce in the assembly. The Mayor goes on record as saying he does not endorse the 28% tax increase incorporated in the four year budget, which includes the 2007-2008 current budget year the city is now in.

The Letter follows, as it was released to the media today:  

Assemblyman Adam Bradley

Assemblywoman Amy Paulin

Attached is the five-year budget outlook that the City is required by the State to have on file in the Finance Department.  I am releasing this information “without prejudice,” and there are several caveats that I have to make regarding this information.

First, I, as Mayor, cannot verify that the forecasted increases predicted in this document as it relates to salaries and benefits is accurate.  I am acutely aware of and sensitive to any Taylor Act implications this would have.

Second, I am not, by any means, endorsing the 28% tax increase forecast over this period by this document.

Third, there are several anticipated revenues that simply cannot be verified, such as the sale of city-owned property and other so called “one shots” that are included.

Fourth, this information is prepared by the Finance Department and is updated at least twice annually, and in some cases, more often than that.  As you are aware, the administration of a city the size of White Plains is a fluid situation that changes continuously.  Many factors can and have upset the balance that this document forecasts.  Fuel prices, inflation, public safety issues and a host of other factors greatly influence the City’s finances.  Some of these issues can be forecasted fairly accurately, some cannot.

Fifth, any change in State aid or passed on expenses from other levels of government affects every municipality’s ability to budget accurately.

However, what has had the largest impact on the City’s budget over the last five years are several unexpected expenses that are beyond the control of the City’s administration.  The real estate formula applied by the State has led to a surge in tax certiores, impacting last year’s budget by more than $2 million more than was budgeted for.  In addition, the recent, unprecedented jump in the State Pension Fund contributions has significantly impacted the City’s budget.

Obviously, the tremendous revitalization and success the City is having is also causing it to suffer because of the formula the State utilizes in setting the equalization rate for property taxes.  These losses may have been off-set greatly had the City been allowed to have its own Industrial Development Agency (IDA).  White Plains has been forced to forfeit the administrative and other fees charged to developers by the Westchester County’s IDA.  I appreciate your efforts to secure an IDA for the City that will enable us to perhaps, finally, provide property tax relief to our residents from such an agency.

Other unexpected issues arise almost daily.  Just last week the City learned that a State government agency was purchasing a formerly commercial office building in the City.  This property will now come off the City’s tax rolls causing a half million dollar drop in assessments and creating a $500,000 loss in property tax revenues annually.  The increase in the sales tax rate would help us recapture some of these losses.

I am simply asking that White Plains’ sales tax rate be equal to that of the other large cities in Westchester County.  This increase is totally justified given the large number of County and other government offices that are located here.  These office buildings, court houses and other agencies pay no property taxes and yet the City is forced to provide services for the thousands of government employees who commute here daily.  The only way for the City to recoup the costs of providing services for these governmental uses is through the sales tax collected on expenditures by employees of these agencies. The sales tax increase would help recapture some of the expenses of these services instead of passing them on to White Plains residents.

The same argument also holds true for the more than 250,000 people who visit the City daily to work, shop and recreate.  I shudder to think of what the taxpayers would have paid if it were not for our aggressive redevelopment plan. In six major projects that the City has undertaken, Bank Street Commons, Clayton Park, the Ritz Carlton, City Center, the Jefferson Condominiums and Fortunoff, where new development replaced either vacant stores or vacant land, the total tax revenues, which includes PILOT payments, increased from $1.8 million before the redevelopment to nearly $12 million in total this year.  But the property taxpayers only receive a fraction of this new total.

The School District alone receives nearly $8 million of this new revenue and the County receives approximately $1.6 million.  The City portion from these projects has increased from $360,000 pre-development to more than $2.3 million today. But it is the property taxpayers alone who have been forced to shoulder the burden of catastrophic and unanticipated expenses forced on the City from higher levels of government.  

Raising the sales tax rate by one-half of one cent would generate more than $10 million annually which would be used to relieve the property tax burden on our residents. IRS analysis has shown that 90% of the revenues collected would come from people who live outside the City – mainly from the 250,000 to 300,000 people who visit our City daily to work, shop and/or enjoy the vibrant entertainment venues the City now offers. 

The City has been unfairly accused of not having a five-year plan, which, as you know, is required by the State to be maintained in the Finance Department.  While I agree that it’s important to have a flexible five-year plan looking forward, I ask who could have predicted the enormous and unanticipated expenses brought on the City in the last five years alone?  I respectfully ask if you could provide a five-year projection on expected state expenses that will be passed on to White Plains and /or any increases or decreases we can expect in State aid so that a more accurate five-year projection can be made.

I believe very strongly that we’ve been successful at creatively filling the gaps that have occurred over the last five years.  And yet, we have endured the annual criticisms of the use of so-called “one shots” to close our budget gaps.  We’ve been criticized for the sale of city-owned land, increasing property tax rates, the use of fund balance, and for the many other methods we’ve employed to stabilize our budgets.

It’s time to give our property tax payers a break.  I want our residents to be the beneficiaries our City’s renaissance.  The half percent sales tax increase will ensure that our residents will receive property tax relief in the amount of at least $10 million or annually if we do so.

Sincerely,

Mayor Joseph Delfino