July 20, 2011:  Despite a concerted effort by the New York State Conference of Mayors to offer a concrete slate of legislative proposals that local officials believed would help municipalities contain costs, none of the proposed changes were adopted by the New York State legislature.  Clearly, there is a disconnect between those in the trenches running local governments and the people elected to represent municipalities.

Except for the tax cap legislation, very little else was passed that will have any effect, positive or negative, on the Village.  For example, bills were signed into law creating land banks for the purpose of developing blighted property, creating a new permitting process for power plants, allowing municipalities to operate their ambulance services across municipal boundaries, and guaranteeing reimbursement to municipalities when hazardous material spills occur.

The tax cap legislation signed into law caps year-to-year growth in municipal property tax levels at the lesser of 2% and the annual increase in the consumer price index.   It will take effect in the Village's 2012-2013 budget cycle and will remain in effect as long as the state's rent stabilization law remains in effect, since they were coupled to facilitate passage.

Of great importance to municipalities is that the cost of debt service is not exempted from the tax cap, making the bill a clear disincentive for communities to do much-needed infrastructure repairs such as road paving, drainage improvements, bridge upkeep, and tree replacement.

The one saving grace for municipalities is that the tax cap can be overridden by a 60% vote of the legislative body or the vote of three of the five Village Trustees.   In contrast, school districts must conduct costly community-wide elections and garner 60% of the votes should they need to fund the school above the 2% tax levy limitation.

Sadly, the tax cap was not accompanied by any mandate relief provisions requested by the mayors state-wide and avoided the big issues including pension, health care reform, and binding arbitration reform.  As a result, nothing in the bill will help to control the "cost drivers" now under the restrictions of a tax cap.

The mandate relief that was included in the cap was insignificant to say the least.  For example, municipalities may now recover expenses associated with police officer training should an officer transfer to another force.  Communities are also allowed to now piggyback onto federal contracts for computer software and professional services.

One included "mandate relief" was to create a mandate relief council with power to "recommend" the amendment/repeal of the over 70 unfunded mandates currently in force.  In the interim, however, there is no freeze on the issuance of new unfunded mandates.

One particularly costly unfunded mandate that went unaddressed was the compulsory arbitration statute.  Under this statute, when a municipality reaches contract impasse with a police or fire union, the final step is compulsory arbitration.  A panel is brought in to make an independent decision that could result in a tax increase even though the panel members are not responsible for funding the award, are not directly impacted by the decision, and are not accountable to taxpayers.

As I write this column, the deleterious effects of this statute manifested itself in nearby Clarkstown in Rockland County.  A state arbitration panel awarded the Clarkstown police union a retroactive 3.4% salary increase for 2009 and 2010 even as it conceded that Clarkstown police officers were among the highest paid in the nation with an average salary of $142,000.

The town had requested a wage freeze and a health insurance co-pay based on their economic realities, which included decreased mortgage and sales tax revenues, increased tax assessment challenges, and local opposition by the taxpayers to a salary increase.

The panel ignored the wishes of the local citizens and based their decision on the fact that "the town possesses the ability to fund the increases awarded."  Of course, this can only be done by depleting reserves, raiding the fund balance--which adversely affects a community's bond rating, which in turn makes future borrowing more costly--cutting services, or raising taxes.  No wonder so many people are fleeing New York.

The panel members then leave town never to be seen again, leaving the taxpayer left to foot the bill.  The compulsory arbitration clause also serves to stymie good faith negotiation and leaves communities unable to calculate costs with specificity and intelligently plan for the future.

We cannot continue to kick the can down the road and leave these problems for our children.  I urge you to contact state legislators and demand that the interests of the taxpayers, the most important special interest group, are finally heard.