There are better ways than AIM for state to redistribute money to municipalities

Editor:

The AIM debate is an important one, but at its core, seeking an increase in AIM funds is nothing more than a futile attempt at redistribution of wealth, which is at the core of the State of New York’s problems – the state captures revenue generated in the local municipalities, and then decided how much to give back.

It has created both an unhealthy dependence on state lawmakers, and a scapegoat for county governments that decide to spend recklessly on pet projects, sell-off important assets such as a nursing home, or hoard sales tax revenue.

Even though Representative Hawley’s Tier 1 and Tier 2 proposal is severely flawed because it simply shifts the majority of AIM funds to less populous regions and flips the burden, resulting in less per capita for anyone who happens to live in areas with high population density- at least he has done something tangible.

It should be noted that Hawley sponsored a bill on January 3, number A01985, which called for an increase in AIM funds, and included the Tier 1, and Tier 2 components spelled out in his editorial. The editorial that launched this debate appeared more than a month later and stated “Our elected representatives in the state government have failed us in Orleans County with this issue. They don’t speak out about such a glaring disparity in state aid to our villages and towns, compared to small cities in the state.” That seems like an unfair criticism in retrospect.

Moreover, Hawley submitted a letter to the editor, and while it was not posted to The Hub’s social media page so it did not have nearly as large an audience as the original AIM editorial, Hawley is the only elected official that made any effort to make his case with specifics, beyond saying “we want more money.”

There is a viable solution, and that is to eliminate AIM and replace it with a program that allows counties to keep a larger portion of sales tax revenue. Currently it is a 50/50 split, with 4% going to the State of New York and Orleans keeps 4%. Some jurisdictions have a 7% sales tax, and some are slightly over 8%, but if the State decreased the amount they capture to 3.8% and gave the rest back to the counties.

Assuming Orleans County collects $22 million a year, which would result in an increase of $550,000 in sales tax revenue that would be distributed back to towns and villages. It would make counties have more skin in the game and more of an incentive to grow the tax base, as opposed to a fixed amount doled out by the State.

In addition, the state could add a portion of each county’s income tax, which would also encourage municipalities to grow their workforce.

A per capita plan sounds good on paper, but the reality is that there is a substantial difference in the cost of living in different regions. For example, in 2022, the median sales price of a house in Orleans County was $150,000, in Monroe County it was $204,000, in Erie it was $226,000 and in Westchester County it was $770,000.

Ultimately, the State needs to move away from their role of gatekeeper of tax funds, and restore local accountability. AIM is a small portion of the money states funnel back to localities, but they are unrestricted funds, so there needs to be some scrutiny involved.

The only other proposed solution is to sign a letter penned by NYCOM, which says “If the State truly wants to ensure affordability and public safety for all New Yorkers, now is the time for an increase in AIM funding for cities, villages and towns.”

Which sounds great, but has zero specifics other than to ask for “an increase.” So the only thing that letter provides is an opportunity for a press release.

Thom Jennings

Oakfield