Governor puts AIM funding back in budget for villages, towns

By Tom Rivers, Editor Posted 15 February 2019 at 3:59 pm

Money, however, will come from counties’ sales tax

(Editor’s Note: This article was updated at 6:55 p.m. to show the AIM restoration is proposed to come from the county sales tax.)

Gov. Andrew Cuomo announced today he was putting $59 million in proposed cuts in AIM funds to towns and villages back into the state budget. However, the funding restoration will come from the local sales tax, not the state.

Orleans County towns and villages stood to have their Aid and Incentives to Municipalities (AIM) reduced by $290,276. Those towns and villages already receive a tiny sum compared to counties with cities.

But with the governor’s initial proposed budget, eight of 10 towns in Orleans and all four villages would have been cut to nothing in AIM.

The governor proposed eliminating the funding unless it represented more than 2 percent of a town or village’s budget. Two towns in Orleans are just above the 2 percent threshold. So the governor proposed that Murray keeps its $44,677 and Albion, its $46,944.

The other villages and towns were slated to lose the following in AIM funding:

Villages: Albion, $38,811; Holley, $17,786; Lyndonville, $6,251; and Medina, $45,523.

Towns: Barre, $12,486; Carlton, $13,680; Clarendon, $11,416; Gaines, $21,323; Kendall, $21,299; Shelby, $45,007; Ridgeway, $46,273; and Yates, $10,421.

The governor today announced the budget amendments to ensure towns and villages will not adversely impacted by changes to the Aid and Incentives to Municipalities program.

The governor’s proposal would use additional sales tax revenue from the elimination of the internet tax advantage to keep towns and villages whole. Approximately $59 million in revenues for towns and villages are preserved through this action.

To ensure locals receive these additional resources faster, the State will also implement the Internet sales tax requirements earlier, starting June 1 of this year as opposed to September 1, the date originally proposed in the Executive Budget.

“The original proposal only impacted localities receiving a relatively small amount of money, but I have been contacted by mayors and local officials who say in these tough times it would still be a challenge for them,” Governor Cuomo said. “That is why we are revising the executive budget to use internet sales tax revenue to make these impacted localities whole.”

The elimination of the internet tax advantage was included in Cuomo’s FY 2020 Executive Budget and ensures that out-of-state merchants do not have a price advantage over the state’s retail community, the governor said. New York’s brick and mortar retailers are currently at a disadvantage because many online retail competitors are not collecting sales tax. This unequal treatment is unfair to the retailers who do collect sales tax, the customers who pay sales tax, the public at large who is forsaking state and local revenues, and the people who depend on the public services supported by those revenues, Cuomo said.

On an annual basis, collecting sales tax through internet sales is expected to generate $390 million in additional revenue for local governments.

However, that increase would be used to pay for the AIM restoration, rather than going to boost the local sales tax. Associations that represent counties, towns and villages are criticizing the governor for the proposal.

New York Conference of Mayors represents villages and cities in the state, and protested the AIM cuts. NYCOM Executive Director Peter A. Baynes issued this statement today:

“While we appreciate the fact that the Governor has acknowledged that the elimination of AIM funding would have serious implications for the state’s villages and towns, his ‘restoration’ of this $59 million is in reality a robbing of one property taxpayer to pay another. Rather than playing this shell game, New York State should be fulfilling its obligation to increase its investment in municipal aid and the property tax relief it will generate. Imposing a new mandate on counties to make up for the state’s cut to villages and towns will only further harm New York’s already overburdened taxpayers.”

Association of Towns Executive Director Gerry Geist released this statement:

“Instead of restoring AIM funding and signifying a desire by the state to act as partners with local governments, the Governor’s 30-day amendments would require counties to make up for a town’s lost AIM money with sales tax revenue. Sharing sales tax should be on top of proper state funding. This proposal does nothing to reduce property taxes, and takes money out of one hand to pay the other. Rather than supporting this attempt to pit local governments against each other to the detriment of New Yorkers the Association of Towns continues to call for a full restoration and increase in AIM funding by the state.”

Stephen J. Acquario, executive director of New York State Association of Counties, issued this statement:

“The Governor’s thirty-day amendment ‘fix’ to earlier cuts to the Aid and Incentives to Municipalities (AIM) uses future Internet sales tax revenue that he is taking from counties to cover forced shortfalls. This is a horrible precedent and unnecessarily shifts the state’s burden to local taxpayers who already pay some of the highest taxes in the nation.

“The state could have used its share of internet sales tax revenue to make municipalities whole. Forcing counties to use a portion of their internet sales tax revenue to reimburse our municipal partners does not help the state reduce property taxes or help to offset the costs of services to our residents. In the end, local homeowners and businesses just keep paying more for decisions made by the state.”

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