Municipalities face cuts in state funding

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A proposed cut to state funding for municipalities in Governor Andrew Cuomo’s 2019-20 executive budget has towns and villages scrambling to fill holes in their budgets.

The Aid to and Incentives to Municipality (AIM) program distributes state aid to municipalities to use however they wish.

Governor Cuomo’s 2019-20 executive budget proposes the elimination of AIM funding for municipalities whose AIM amount is less than 2 percent of their local fiscal year 2017 expenditures.

If passed, the proposal would cut $16.4 million from the budgets of approximately 90 percent of the state’s villages. It would also cut about $42.7 million from the budgets of the state’s towns.

Maybrook will lose $13,179 in funding, Walden will lose $47,095, and the Village of Montgomery will lose $14,162, all of which represent less than .5 percent of each village’s 2017 expenditures.

Crawford will lose $23,088, or .28 percent of its 2017 expenditures. Montgomery will lose $68,115, Gardiner $16,097 and Shawangunk $33,467, each of which represent around .5 percent of 2017 expenditures.

This is not the first state cut to AIM funding. According to Assemblyman Brian Miller's office, AIM was cut by $26 million in the 2010-2011 budget, and by $14 million in the 2011-2012 budget. If it goes through, AIM will lose $59 million.

Villages do not approve their budgets until the deadline of March 20 for tax year 2019-2020, however village mayors agree the cuts will hurt their budgets and taxpayers when the village loses funding it thought it would have.

Maybrook Mayor Dennis Leahy said the cuts make it hard to make ends meet when expenditures continue to increase and funding decreases.

“We need every penny we can get,” Leahy said. “It makes it very difficult for the towns and villages to do their budgets.”

Leahy said it would be premature to comment on whether the cuts would cause tax increases or program cuts.

He has reached out to senator James Skoufis and assemblyman Brian Miller to express his concerns, both of which said they would fight the proposed cuts. Leahy also contacted Cuomo.

Skoufis confirmed that he is lobbying to restore AIM funding, stating the cuts will make it more difficult for municipalities to meet the tax cap.

“Towns and villages rely on funding from the AIM program to balance their budgets without breaking the property tax cap,” Skoufis said. “Cutting AIM funds would make it harder for local governments to maintain the services residents demand without raising taxes.”

Walden Village Manager John Revella said if the cuts go through, the village will have to do a combination of raising taxes and making cuts. The funding keeps taxes down by one percent.
The cuts are part of longer-term trend of villages being financially squeezed, despite being the closest representative to the people, Revella said.

“[Cuomo’s] overall goal in the last three years has been trying to squeeze towns and villages altogether out of the state of New York, even though we’re the most grounded and local representatives that people have,” Revella said.

Towns already approved their fiscal year 2019 budget in December, so they would not receive the money they have already budgeted for.

Montgomery Town Supervisor Rodney Winchell said the board passed a balanced budget that comes closer to matching actual revenues and expenditures than previous years, when the board frequently overbudgeted. If the cuts go through, the loss of revenue will have to be made up somewhere because the 2019 budget has already been approved.

Winchell said if the cuts go through, either every town department will be affected or the part-time town clerks and specific positions in the town police department and highway department will see cuts.

Shawangunk Town Supervisor John Valk agreed with Winchell, expressing concern for what might need to be cut if the budget is proposed.

“That’s quite a hunk of money that we’ve gotten for thirty years, it’s not something that’s just recently been given to us, but it’s recently been proposed to take it away, and $33,000 is a salary for an employee,” Valk said.

Valk said the increase in internet sales tax will not make up for the loss in funding because counties take most of the share of sales tax. Cuomo proposed the Internet Fairness Conformity Tax, which would close an internet loophole that has allowed Amazon, Ebay and other online sellers to avoid collecting sales tax on sales by third parties who use the companies’ platform to sell products.

“Twenty towns share three percent of the sales tax, so we could never make it up,” Valk said.

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