Schenectady council OKs sales tax agreement with county
Budget analyst voices opposition to new deal
SCHENECTADY The city’s budget analyst risked his job Monday by coming out publicly against the sales tax agreement with the county — but all he won was a short delay.
The City Council stopped its meeting just before the vote and held a last-minute heated discussion behind closed doors.
Then the council returned and voted 4-2 in favor of the agreement, which gives the city just $500,000 more than it has received for many years.
However, Council President Denise Brucker thanked budget analyst Jason Cuthbert for the information he provided before the vote, and he was not fired for speaking against the deal.
Cuthbert provided two charts showing that the city had received a “flat line” of $11 million in sales tax each year, while the county collected more and more, hitting $60 million this year.
Councilman Vince Riggi said the chart was so simple, “a four-year-old could figure it out.”
“We’re being shortchanged, we’re being low-balled,” Riggi said.
Riggi and Councilman Carl Erikson voted against the sales tax agreement.
Erikson argued that the county should share far more of the sales tax revenue. The city got 44 percent of the sales tax in 1998; the same percentage today would equal $20 million. Instead, the city will get $11.7 million.
“This deal is not good enough for the city of Schenectady,” Erikson said.
But county Legislator Gary Hughes said the county gave the city $4 million more each year than it would have collected on its own for the past two decades.
He said the city could now collect $11 million on its own, but the county simply could not afford to give more than $11.7 million.
Since 1990, he said, the county’s mandated costs have gone up more than $70 million, while sales tax has increased $45 million.
“There’s no money left on the table,” Hughes said. “This is the best agreement we’re going to get.”
Cuthbert disagreed. He argued the agreement is the worst in the state, and that the county could easily afford to give the city another $6 million to $7 million by restoring the 2006-2007 tax rate. That rate would cost about $100 more per property owner, he said.
“But instead, the county cut and cut and cut county property taxes and now cries poverty,” he said.
“To vote for the sales tax deal in front of you is to vote for higher city taxes, for reducing and eliminating city services, for laying off dozens of city employees, and likely in a couple years’ time, for a fiscal control board to take over the city.”
Others also doubted Hughes’ statement that the county couldn’t afford to share more of the sales tax.
“The county of Schenectady is in a much better position than the city of Schenectady,” Republican council candidate Rich Patierne said.
Resident Gerald Plante called the county’s deal “a drop in the bucket” and told the council to refuse to help the county in the future if the county won’t budge on sales tax.
“They need to help us,” he said. “We need more money.”
Others criticized the deal because it will last eight years; previous deals lasted only four years.
But in the end, council members said an eight-year deal was for the best.
Councilwoman Leesa Perazzo said she supported it because it would give the city financial stability and reassure Moody’s when it sets the city’s credit rating. She voted in favor of the deal.
Councilwoman Marion Porterfield, who also voted in favor, noted that the deal will allow the city’s share of the sales tax to grow each year. If the total revenue grows by 2 percent, the city’s share will increase by 2 percent.
Councilwoman Margaret King said the deal was also fair — to both the city and the county.
“If we were to turn this down, I think it could potentially jeopardize the county library system, the community college system,” she said.
Brucker agreed. “Would we like another $5 million? Yes, who wouldn’t?” she said.
But she noted that the county must pay for items that help city residents — including Medicaid and welfare.
So she cast the final vote, approving the deal.
The council immediately turned its focus to layoffs, considering seven positions because of the city’s precarious financial state. But the council voted 3-3, with Porterfield joining Erikson and Riggi as “no” votes, and the layoffs did not pass.
Brucker said the measure would not be the last.
“It’s probably the first time in my life we’ve had to vote for layoffs, that it actually came down to that,” she said. “I do predict this is just the beginning of the elimination of other positions within the city of Schenectady, within the county, within the state.”