Monday, March 4, 2013

[UPDATED] Hey, state comptroller, tell us something we don't know

Posted by on Mon, Mar 4, 2013 at 11:37 AM

A statement from Rochester Mayor Tom Richards follows this blog.

A report released today by the State Comptroller’s Office — essentially a summation of the City of Rochester’s fiscal profile — reads like a compilation of the city’s greatest hits. In short, it doesn’t say anything we haven’t heard a thousand times before.

Some highlights:
• The city’s 9.8 percent unemployment rate in November 12 was higher than the statewide average of 7.9 percent. Monroe County’s unemployment rate for the same period was 8.1 percent.
• Property values increase 1.9 percent on average from 2001 to 2011.
• At 25.8 percent, Rochester has the highest percentage of families living in poverty of any city in the state.
• The city is at 74.9 percent of its Constitutional tax limit and 60.8 percent of its debt limit.
• Revenues grew at an average annual rate of 3.6 percent from 2001 to 2011, compared to the statewide average of 3.4 percent.

The report also points out the disparity in the amount of aid Rochester gets from the state compared to the other three “Big Four” cities — Syracuse, Buffalo, and Yonkers. Rochester gets $419 million annually in Aid and Incentives to Municipalities money — the largest chunk of its state aid — while the other cities get approximately $566 million.

If Rochester were brought up to par with the other cities, it would have received an additional $31 million annually, “which would go a long way toward closing the recent budget gaps the city has been projecting,” the report says. The AIM disparity lament is frequently voiced by Mayor Tom Richards, Rochester business leaders, and others in the community.

Statement by Mayor Thomas S. Richards on State Comptroller Thomas DiNapoli's Fiscal Profile of Rochester

(Monday, March 4, 2013) - State Comptroller Thomas DiNapoli's "2013 Fiscal Profile - City of Rochester" tells the story we have been telling for some time - that we are doing as well as we can, but we are struggling to keep up financially. I want to commend Comptroller DiNapoli for recognizing the disparity in Rochester's per capita Aid and Incentives to Municipalities, or AIM state aid. Rochester's Profile notes that if there were parity with the state's other Big Four cities - namely, Buffalo, Syracuse and Yonkers - an additional $31 million in revenue would flow to Rochester.

I take great pride in Rochester's conservative fiscal management. This is displayed in Comptroller DiNapoli's report where he references the City's A ratings from independent bond rating agencies, Moody's and Standard & Poors. We also take great pride in the systemic fiscal changes we have made to shrink our structural budget gaps while maintaining high levels of these services to keep Rochester attractive to our residents and visitors. We must maintain these services while accepting responsibility for dealing with as much of the structural gap as we are able. Below are a few of the measures the City has taken to accomplish this:

. We managed and reduced our capital expenses;
. We instituted a hiring freeze and reduced employment by 14 percent over the last 10 years;
. With our unions, we created a self-insured health care plan. The unions have agreed to share the risk of increased costs, capping our portion of any increase to 3.75 percent, saving $4 million annually;
. We entered into a single-provider health care agreement with our unions saving taxpayers $10 million annually; and
. Two years ago, we instituted a one-time early retirement incentive saving the City millions in pension costs and avoiding additional layoffs.

The steps that we have taken over the last few years have reduced our projected 2013-2014 structural budget gap by $14.8 million, but we still face a $27.9 million shortfall and the challenge of how to preserve investment and maintain services in the face of that.

Comptroller DiNapoli's report focuses on and refers frequently to the Real Property Tax. It is the traditional source of funding for cities - and the only source we control. This is an 18th century model that is incapable of dealing with 21st century realities. By the time we pay the state-mandated school district payment of $119.1 million and our $52.1 million pension payment, all of our Real Property Tax, plus millions more, is gone.

Cities throughout Upstate also deal with extremely high concentrations of poverty and therefore, require higher levels of service provision. Comptroller DiNapoli's report acknowledges that Rochester's poverty rates are among the highest in the state and the country. Rochester may not be the poorest city, but our concentration of poverty is significant.

Despite these factors, let's not lose sight that we live in a vibrant city, and it is important that we stay focused on investing in it if we intend to thrive. In Rochester, we have an effective affordable housing program that over the last five years has yielded $450 million in public and private investment creating or preserving more than 2,800 housing units. We have also accelerated our capital plan to take advantage of historically low interest rates, preserve investment in community infrastructure and neighborhoods and create jobs. And, to protect our neighborhoods we are doubling our demolitions of substandard vacant properties. Despite the financial challenges, we have maintained our recreation centers, branch libraries, police and fire departments.

Comptroller DiNapoli's report correctly points out, as we have been saying, that we have financial challenges. We must find ways to continue to invest in our city and to develop innovative financial tools to address our structural gap. We cannot do this alone. We need New York State to help Rochester and other Upstate cities with long-term and permanent solutions to these financial woes.

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