Teresi Gives State Budget High Marks

Mayor Sam Teresi is praising much of Gov. Andrew Cuomo’s executive budget.

Teresi commended the governor for dealing with the unfunded state mandates that he says are making it difficult for both local governments and citizens in New York.

“Overall, I have to give the governor high marks on the executive budget that he released,” said Teresi. “Under a difficult economy and financial circumstances, it’s never easy to put together a $140 billion budget, especially in a state with a government that is as diverse as New York. Even in tough circumstances, he is working to clean up the messes of the past.”

According to Teresi, Cuomo spoke of several things that relate to cities in general and the city of Jamestown in particular. Looking back at his time serving as the president of the New York Conference of Mayors and as the mayor of Jamestown, Teresi felt that there were several items of note and benefit that were mentioned.

One such item was AIM, or Aid and Incentives to Municipalities funding. These funds are, in effect, the general revenue share that is given to the city on behalf of the state. Each year, New York provides aid to local governments in order to help them carry out the state’s business at the local level.

“The state restricts our ability to collect revenues through means like a local lottery or an income tax and instead hand us assignments to carry out at a local level for which it provides us aid,” said Teresi. “According to the new executive budget, AIM funding is being preserved at the previous funding year level. On the one hand we would have loved to see an increase to help us continue carrying out the state mandates, but at least it wasn’t a cut as we’ve experienced in years past. It’s a bit of a victory for all of the cities across New York.”

The Comprehensive Highway Improvement Program was also maintained at the previous year’s funding level. The budget that was announced will maintain funding statewide at $363 million, which means that Jamestown will continue to receive roughly $700,000, just as they did in 2012. With mounting material costs and construction costs along with the aging infrastructure, Teresi again would have like to see an increase, but was still reassured that the funding would remain the same and not decrease.

“I commend the governor for his continuing recognition and efforts to deal with state mandates,” said Teresi. “They’re literally killing the ability of local governments across the state to deliver services. They’re driving property taxes to the highest levels in the nation. It’s good to see both in his message and the spending plan that he’s continuing to recognize these problems and he’s included some additional steps to help us deal with that at the local level. I’m very interested in getting more information on his pension reform and relief program that he spoke about Tuesday, too. Our initial understanding is that it’s akin to a utility company’s balanced billing program.”

In a balanced billing program, while month-to-month consumption might go up or down, a customer who uses that program will pay a consistent fee. It allows money to be better budgeted and takes some of the strain off of planning over the course of the year.

“The governor has proposed a version of that balanced billing for municipalities to pay their pension bills,” said Teresi. “It would lock our contribution rates at 12.5 percent of payroll for employees in the employee retirement system and 18.5 percent for those in the police and fire retirement system. It would allow us and other municipalities to better plan and budget over a longer period of time, which is why I would encourage the members of the legislature to enact this program.”

According to Teresi, if enacted, this program would be an option given to all municipalities, but not a requirement.

“If it is enacted, it may hold some promise to Jamestown and cities across the state that are being strangled by mounting pension costs,” said Teresi. “I see this as a positive step by the governor. He stepped up to the plate and came up with another way to relieve us of some of the costs that we face, but only time will tell if it will be enacted and whether or not we will pursue it.”

The governor also spoke about binding arbitration reform during his address on Tuesday. Binding arbitration has been in existence in New York since 1974, and it pertains to settling contract negotiation disputes with police officers and fire fighters. This is something that disproportionately impacts city governments because they typically have a paid police department and a paid fire department. If, through the process of negotiation and mediation, two parties can’t come to a settlement, a three-member panel is set up to impose a decision with one member selected by the municipality, one member selected by the union that represents the police or fire department, and the third member is appointed by New York.

“It’s my position that it was wrong when it was put into effect in 1974,” said Teresi. “What the governor has proposed isn’t exactly the solution that I and other mayors of New York were hoping for, which was for the legislation to be allowed to sunset and go away. Politically though, that’s not likely to happen in a state like New York. The next best thing would be to initiate some long overdue reforms, and the governor outlined one such proposal yesterday, which I can find some value in and support. Hopefully this reform and more like it will level the playing field for local governments and their already stressed tax payers to cover decisions made in binding arbitration.”

The proposal outlined by Cuomo will require there be consideration of the ability of local tax payers to pay any imposed settlements and, specifically in the cases of distressed municipalities, it would limit binding arbitration settlements to no more than a 2 percent increase in pay.

“By finally dealing with the high cost structure of local government, we will effectively address our punishing tax burden and again make the Empire State an inviting and competitive place for private investment and job creation,” said Teresi. “I applaud the governor for continuing to push for all of these reforms, and I think this is a good initial step in the right direction.