Letter to Legislature

ASSOCIATION OF TOWNS
OF THE STATE OF NEW YORK

G. JEFFREY HABER
EXECUTIVE DIRECTOR

Preserve Local Revenue Sharing (AIM FUNDING)

While New York State's fiscal needs must be addressed, shifting these expenses to local property taxpayers will not solve the State's fiscal crisis or bolster New York's economy. All New Yorkers are impacted by escalating property taxes and local government fees whether through ownership or renting or loss of jobs. Decreasing state revenue sharing and local aid programs will result in program cuts, deferred infrastructure maintenance and/or higher property taxes and fees.

Towns are scheduled to receive $51,802,333 in revenue sharing in the 2008-09 state fiscal year; a six percent reduction would leave town taxpayers with a $3,108,139.98 gap in their budgets. Town officials relied on receipt of this money when developing their budgets for the current town fiscal year, which tracks the calendar year. In addition, local governments are already receiving less assistance from state agency programs due the Governor's directive to reduce state operating expenses by ten percent.

The importance of general-purpose revenue sharing cannot be overstated. A lack of adequate revenue sharing contributes to high real property taxes. More than anything, our towns need a steady stream of non-property tax revenue upon which they can rely. Local governments are relying more and more on economically sensitive revenue sources such as sales taxes and mortgage recording taxes. Comptroller DiNapoli recently warned local governments to cautiously predict future sales tax revenue due to the weakening economy. Revenue from mortgage recording taxes are expected to drop as well with the widespread housing crisis and stricter mortgage standards leading to less refinancing. In addition, real property tax revenue may decrease as well due to lower home values and assessments. At the same time, local government expenses are continuing to rise with the escalating price of commodities and inflation.

A six percent reduction over a twelve month period would be burdensome to real property taxpayers. Any reductions over the remaining four months of the town fiscal year could create serious fiscal dislocation. Therefore we urge you not to approve the recommended decrease in local revenue sharing.