Predicting pushback, gov advances consolidation plan

People person: Gov. Andrew Cuomo is empowering Suffolk Executive Steve Bellone, and countywide voters, in his quest to reduce some of the highest local property taxes in the nation.
By GREGORY ZELLER //

With the federal government set to deliver a crippling tax blow to Long Islanders, Gov. Andrew Cuomo backed word with deed Thursday, setting in motion his master plan to lower this region’s astronomical property-tax rates.

Harkening to promises he made earlier this year during his annual State of the State tour, the governor signed the Middle Class Recovery Act, authorizing Suffolk County Executive Steve Bellone and other statewide county execs to gather representatives of local governing bodies – in Suffolk, Cuomo pegged the number at 400 – and force them to brainstorm a plan for shared services and joint purchases that would chip away at property taxes.

And to ensure cooperation among the leaders of those “400 individual fiefdoms,” as Cuomo put it, the law requires that the planning be conducted publicly – including televised discussions – and that officeholders send letters to constituents explaining their positions on sharing costs, or not, with neighboring governments.

Noting the deleterious effects of Nassau and Suffolk’s heavy property-tax burdens on both individual and corporate ratepayers, Cuomo first announced his intentions to mandate service and purchasing consolidations months ago. On Thursday, he added bite to that bark, inking a bill that puts unprecedented power to assemble the troops – and make them play nicely together – in the hands of statewide county executives.

Steve Bellone: “Significant mandate” for government fiscal responsibility.

Bellone, who manned the podium at the Melville headquarters of General Building Laborers Local 66 to introduce Cuomo for the legislative signing, said local governments face “some of the toughest budget challenges of our time” – and called Cuomo’s plan “a significant mandate … to reduce costs and promote fiscal responsibility.”

“At the local level, it’s our job to do what we can to make government more efficient and effective,” Bellone told the audience, which included regional officeholders past and present and numerous boosters friendly to the governor’s plan.

While sharing costs to reduce overall expenditures – and, by extension, lower taxes – sounds like a simple and logical approach, the waters become muddied when dueling districts feel their independence is threatened. That’s a scenario Bellone and other county executives will have to be prepared for, according to Cuomo, who predicts plenty of pushback.

The governor pantomimed what he expects to be the reaction of many local lawmakers – petulantly crossing his arms and shaking his head – and suggested some would see the consolidation mandate as an indictment of their individual governing performances.

But Cuomo dismissed as fantasy the idea that any local government was operating at peak fiscal efficiency, let alone 400 of them – and said local lawmakers had better be prepared to either find cost-saving efficiencies or explain to voters why they couldn’t.

“I do not accept the premise that you’re running a perfect organization,” Cuomo said. “I don’t believe there are no more efficiencies you can find. There are always more efficiencies.”

The fact is, according to Cuomo, that the 2 percent annual cap Albany put on local property-tax increases almost seven years ago – curtailing annual hikes that spiraled unabated into the 8 or 9 percent range – “isn’t enough.”

“A 2 percent increase is still an increase,” the governor said. “With the pressure people are feeling today, we have to try to reduce the property taxes.”

While always a critical issue on Long Island, the region’s nationally highest property tax rates – Nassau and Westchester counties flip-flop regularly, with Suffolk close behind – are an especially important matter now, with a pending federal tax proposal poised to pour salt into the Island taxpayer’s wounds.

Currently, U.S. taxpayers are able to deduct the amount they pay in state and local taxes from their taxable federal income. But House Republicans are angling to eliminate that deduction, because “they want to do a tax cut for the very rich,” Cuomo said, “and they have to find the money for that.”

Bottom line, should that proposal come to fruition: an increase of up to 40 percent in individual federal tax payments, about $1.3 billion in annual costs for Long Island as a whole and a $4,500 annual hit for the “average Long Island family,” according to the governor.

“Basically, you’re going to be taxed twice,” Cuomo said. “So, we have to get the property taxes down not just because they’re too high in and of themselves. If this passes, it will be devastating. And with this Congress, anything is possible.”

Hence the new state law, which gives execs unprecedented power to convene local lawmakers, calls for open public hearings and, perhaps most importantly, permits public dissemination of those hearings, in addition to requiring local legislators to explain their thinking on consolidation.

“The process will be public,” Cuomo said. “The voters will see the town official saying, ‘I hate (former Assemblyman and current Oyster Bay Supervisor) Joe Saladino, and he’s not driving my truck, so I’m buying a new truck for $200,000.’”

And that, the governor predicted, will not stand.

“The ultimate power in politics is the people,” he noted. “The voters have had enough. And when they find out that 400 governments don’t want to play nice together, and because of that they’re paying a higher tax bill, they’re not going to be happy.”

But it doesn’t have to be that way, according to Cuomo, who used Suffolk as his case study throughout Thursday’s press event and suggested potential cost-savings through vacancies in some of the 126 government office buildings scattered throughout the county, or in the “4,000 pieces of heavy equipment” he says are purchased annually – often redundantly – by neighboring Suffolk agencies, or in joint purchases of insurance and everyday supplies.

“There have to be ways to find savings among us, once you give up the illusion that we are 400 separate entities,” Cuomo said. “You are all in the basic business of providing community and public services.”

While he acknowledged that the county executives and thousands of statewide legislators face an “incredibly difficult exercise,” reducing regional property taxes “has never been as important as it is now,” Cuomo said, noting just a 3 percent across-the-board reduction in combined expenses would save Suffolk ratepayers some $384 million annually.

“We must change our basic model, change our basic thinking,” the governor added. “This is both incredibly difficult and vitally important.”