Report: State Taxpayers Face A Fiscal Storm
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ALBANY – Costs rising at a rate twice that of inflation, slow growth in revenue, and forced reliance on more debt means more tough times are likely ahead for local taxpayers, a state comptroller’s analysis shows.
State Comptroller Alan Hevesi’s recent study said local governments are depending more often on sales tax increases to boost revenues. Many municipalities are borrowing more and approach their tax limit despite continued population declines.
For example, the analysis showed local government debt increased 46% to $29.7 billion between 1998 and 2003. In addition,49 of 57 counties have sales tax rates that exceed 3% (in addition to the state sales tax), with eight counties exceeding 4%. Some counties, including Oneida County, have a combined local and state sales tax approaching 10%.
But the report is more than a warning; it could be used as a blueprint to finally consolidate more services now provided by New York’s patchwork of thousands of villages, town, cities, and counties.
“I think counties are in a constant state of looking into intergovernmental operations,” Stephen Acquario of the New York State Association of Counties said. “Regional projects, regional issues, perhaps regional jails and regional nursing homes will be in our future … this report lends itself to that.”
Mr. Acquario notes, however, that pleas by governors and the state attorney general Eliot Spitzer to consolidate have failed to substantially streamline local government services. But Mr. Hevesi’s report shows the time to delay and combat the politics of consolidation may soon be over.
“The comptroller’s report validates what our counties have been talking about for the last several years,” Mr. Acquario said. “County governments have been asked [by the state] to do more with less … there’s only so much you can raise property taxes.”
Mr. Hevesi noted local governments have been hit by rising costs from Medicaid, the health care plan for the poor run by the state, and by rising public pension costs set by the comptroller’s office after stock market losses.
“While the underlying fiscal conditions facing local governments vary drastically based on geography and by type of government, the majority of local governments are struggling to contain costs and grow their revenue base,” Mr. Hevesi said. “Alarmingly, many are increasing their reliance on debt.”