WPCNR QUILL & EYESHADE. By John F. Bailey. January 31, 2008 UPDATED February 1, 2008 : The Budget & Management Committee learned Tuesday night that Assemblyman Adam Bradley has not yet put the city home rule request for a ¼% increase in the sales tax  and a $3 per room hotel tax home rule into action in the assembly and the senate.  Paul Wood, the Mayor’s Executive Officer, said city hall requests to Mr. Bradley have produced no indication when Mr. Bradley plans to put the home rule requests in play.  WPCNR speaking to Mr. Wood Friday would like to correct any impression that Mr. Wood had said the  two bills had not been introduced yet. Mr. Wood Friday said the bills had been introduced and did have bill numbers but they may not be passed in time to contribute to the current budget.

WPCNR checked with Mr. Bradley on the status of both home rule requests. As of  nightfall Wednesday, Mr. Bradley had called WPCNR (but we could not connect)  and WPCNR expects to have a report from him Thursday on how the sales tax increase is going and when it can be expected to pass the legislature.

 This information left in question whether the tax increase and new hotel tax would go into effect to aid city revenues in the current fiscal year, or for the new fiscal year coming up. The Budget and Management Committee also raised concerns over city benefits, the need to see a preliminary rough budget within a month.

Pat Austin of the committee bid strongly that the committee see a run-through of the budget from Commissioner of Finance and Chief Financial Officer Gina Cuneo-Harwood – information they did not receive during the  Committee’s deliberations in last year’s budget session. Ms. Harwood said it was impossible to provide the complete budget to the committee prior to the Council receiving the budget. Mr. Austin recalled that in the past the committee had received “preliminary budgets” enabling the committee to make recommendations

Tim Sheehan, another member strongly suggested  in a long and involved statement, that the committee focus in and consider where employee benefits might be trimmed, since wages and benefits would add, even without increases, a $6 Million increase in the city budget (sitting on $154.5 Million).

All Unions up for Contracts 

Paul Wood acknowledged that all city unions, Teamsters, Police, Fire and CSEA, contracts had to be renegotiated for 2008-2009. 

Benjamin Boykin  (in response to committee member David Corcoran’s comment that in his company  salaries over six figures  were being held to no increases, and raises otherwise under six figures were holding at 3%), said that city raises had reflected inflation. 

However, WPCNR notes city contracts for police, fire, and teamsters negotiated In 2005 ( the last election year), that have been in effect the last three years were negotiated at 4% a year when inflation averaged about half that figure at the time of the negotiations, and has only on a couple of months in the New York area topped 3%. Ms. Harwood said the 4% only affected start salaries for the unions and did not apply to the step increases.

Information, Please! Please!

Mr. Austin pressed the issue on getting information  on what the budget would look like in rough form so the committee could make suggestions. Mr. Boykin, the Chair of the Committee, who pressed for the same expense information from Harwood last year, and did not get it, and did not press the issue last year,  told WPCNR after the meeting he would try to get expense run-throughs for the committee to review within the next month.  Harwood said she would get department budgets by mid February, but did not commit to showing the committee a budget  run-through 

The committee also requested information on where assessments stood. Mr. Sheehan said that though educating themselves was nice, he felt the committee would be better served reviewing benefits to make suggestions where to cut. Larry Delgado, committee member, suggested that as persons paying taxes in the community and also enjoying benefits, that the committee members could make benefits budgeting proposals sensitive to how union and salaried employees would accept them.

Boykin says he will try to get the info.

Mr. Boykin said he would attempt to get benefits information to the committee for discussion, but did not elaborate what form that would take. Ms. Cuneo-Harwood was silent on this issue and how the benefits discussion would ensue.

Lying on the Land

Joseph Lenchner, a  committee member said that during the campaign the Budget and Management Committee had been characterized as saying it was all right to sell land to balance the budget. He said those who said this were “lying”.  Committee members and Mr. Boykin agreed that possible sale of land had been discussed as ways to increase revenues saying that the Council should consider selling the land but not to raise the budger. They technically did not say you could sell properties to balance the budget, but that was the effect of the Railside Avenue sale last year, and the way it was explained publicly by members of the Council who voted for it, including Mr. Boykin.

 Lenchner asked what the giveaways the city had been accused of giving to developers were. Mr. Boykin warmed to this subject and said that there were no giveaways, that any PILOTS reflected fair market value, and generated important revenue to the city. Boykin said the PILOTS provided the city with revenues – for properties assessed at $35 Million that were off the city tax roll because they received County Industrial Development Agency. 

A Comparison by WPCNR.

For the record, according to documents made public by the city,  the city received $2.6 Million in pilot payments in 2006-2007 from the following properties: 57 Ferris Avenue, White Plains Housing Authority, Power Authority of State of New York, Nine West, Cohen Brothers, 360 Hamilton Avenue, Clayton Park, Bank Street Commons, Fortunoff and City Center.

City appears to lose $2.4 Million a year due to PILOT-ing. School District, $9.6 Million a Year.

If Mr. Boykin is correct and those properties have assessed value of $35 Million, if they were on the tax rolls would pay  a city tax of  $4,997,000 (35,000 x $142/ $1,000 Assessed Value.  The city appears to  lose $2.4 Million a year in taxes from those PILOTED properties a year over the course of their PILOT years. 

The impact is more dramatic when you look at school district figures. The School District loses 4 times that amount annually: $9,600,000 a year, since the school tax rate is $4.74/$1,000 of assessed value.

Trends

Sales Tax: Commissioner of Finance Gina Cuneo-Harwood said the sales tax collections to date are 3.6% ahead of 2006-2007,  and that those figures were only up through December 1, holding out hope that the December figures would buoy the third quarter figures (coming in April). Harwood said she was going to be very conservative about estimating the final two quarters, but expected to make the $45 Million she predicted for 2007-2008.

She said the Mortgage Tax is slowing and was currently at 2.4 Million and was not expecting much more than that.

The Quarter per cent magic.

In a slide show, Ms. Harwood said, the additional quarter per cent envisioned by the home rule request would generate $5.6 Million in additional taxes. Pat Austin asked if the additional percentage of taxes could be added to the budget. Ms. Harwood thought the city charter only provided that the amount of taxes collected the previous year could be budgeted.

Can City  Add $5.6 Million in 08-09 Budget?

Mr. Boykin said the question of whether to add the extra $5.6 Million envisioned in the sales tax increase would have to be explored with the legal department, because he did not know the answer. Mr. Austin raised this question.

Mr. Boykin began the meeting saying “Clearly  the economy is different from last fall,” that the committee needed to be “vigilant,” and that the credit markets might affect developments which might not be able to secure financing.

On assessments, Mr. Wood and Ms. Cuneo-Harwood gave the opinion that the state  equalization rate applied to White Plains  ( finalized at 2.74% this year) was negating the positive effects of the sales tax increases. Wood said that the current round of certioraris would effect the city for the next 7 years.  Wood did say that Lloyd Tasch, the city Assessor was being aggressive in evaluating properties recently increasing in revenues.

 On Hotel Tax: Ms. Cuneo-Harwood noted that the hotel tax would be approximately $3 a room per hotel. She said that presently there are only two hotels in the city, Central Avenue Motel and Crowne Plaza, which would have contributed $180,000 to the city coffers in hotel tax if they were taxed this year, and with the Ritz-Carlton, she expected $680,000.