The City of Troy, New York, "Where Henry Hudson Turned Around."

Monday, November 30, 2015


With a cut here, a slice there, Mayor Rosamilia has stated that the tax hike could be as low as 4.9% That only works, of course, if there's a meeting to vote on a tax cap override. Such a meeting has been in doubt but it appears it will go forward.

The 4.9% possibility also throws the issue back to the City Council. Council President Wiltshire previously stated that he could stomach a 5% increase but not a 8% increase. The extra 3% hurt his tummy. We remain skeptical that anything will happen. The 'No's' simply refuse to cooperate.

That said, we have thought long and hard about this situation during Godfather commercial breaks. The conclusion arrived at? While making for semi-interesting drama, this is not the end of the world.

Mayor Rosamilia has his detractors like all mayors. He certainly has his flaws. In particular, his administrative and public relations skills are about as developed as your average mollusk. The budget issues are not one of those flaws. No more than any other mayor.

Lets look at some of the excuses given for tax hikes and/or threatened layoffs.

There's this excuse:

"Based on the current level of spending and a relatively flat increase in revenues, we
have projected costs through .... Major category expenses included an assumption of
salaries at an increase of 3% for each year .... Salary increases at this rate
(3%) are in place for the CSEA and UFA bargaining groups per their contracts through
.... The other large group (PBA) is currently undergoing bargaining
negotiations. However, based on prior negotiations, we feel safe in assuming a three percent
(3%) salary increase for that group as well. Furthermore, given the current trends, we have
assumed an additional 30% of total salary costs to account for employee benefits, and an
increase in other operating categories of 3.9%."

Translation: Expenses go up.

It is ultimately this administrations goal to close these budget gaps through the
measures described above. However, if these means are not sufficient, an alternative plan will
be presented which includes a potential tax increase and/or layoff. In the worst-case scenario,
the budget gap in ... ($1,202,474) would be closed by implementing a 7% property tax
increase equating to approximately $1,050,000. In addition, the City would implement an
employee reduction of at least 5 positions through attrition and/or layoff. This reduction would
equate to approximately $208,000 provided the average salary of each is $32,000 and fringe
benefits of 30% are anticipated.

Translation: We may need more money.

Or this excuse:

"We've done just about everything we can do to put together a budget to continue the quality of life of the residents. By reducing some jobs from the budget, we're able to keep the tax increase to what I believe is a minimum level."

Or this excuse:

" costs are projected to increase 7.3 percent for 2011, having already jumped 13.8 percent in 2009 and 6.5 percent in 2010. Altogether, there has been a $1.5 million increase in healthcare costs from 2009 to 2011. Despite employees making health care concessions during the last round of negotiations, it does not necessarily mean the cost to the city is reduced."

Or this excuse:

"There is also a "staggeringly high" 41 percent increase in pension contributions, an amount that may change after the city receives the final amount from the State Comptroller's Office on Oct. 15. Of that 41 percent, the city was able to amortize $1.4 million. Because of the amortization, the pension increase will be around 13 percent, but Mazzariello stressed that the increase will have to be paid eventually. "All we're doing is prolonging the inevitable, and postponing those payments to the future," he said."

Then there is the use of reserve funds to keep tax increases low or non-existent.

These, of course, our quotes from the prior administration when dealing with their own budget woes.

There was the threatened 19% tax increase for 2010.

The administration explained:

"Obviously, this is a very serious situation," wrote Crawley. The city's current situation stands in stark contrast to statements made by Tutunjian to The Record last fall that there was no financial crisis in the city because the total amount of money in city reserve accounts then neared $22 million.
"When I say we're in the best shape we've been in for 20 years, it's true," said Tutunjian at that time.

When asked what had changed since then, Tutunjian said that the city received a bill from the state earlier this month informing his administration that its pension costs were going up by $2 million in 2010.

Ultimately, the proposed budget called for a 4.25% tax increase, later reduced to 2.54% by the City Council.

There was the year when spending went up but there was no corresponding tax increase.

The 4.9% tax increase isn't even the largest in the past decade. If you recall, Tutunjian's first budget raised taxes 6.5%. In the first two years he raised taxes 8%.

That is not to criticize Tutunjian. The 'excuses' his administration made for budget woes remains the same today. It remains the same for many northeastern cities. What some people here and there are the internet seem incapable of understanding is that costs increase over time. In particular, healthcare costs and, of course, contractually mandated raises, COLA's etc. Technology needs updating, roads need to be maintained.... If revenues remain flat or even grow at slower rate than prices, guess what?

Cuts can always be made. There is always something that can go. Sometimes increasing revenue costs money. For instance, we could sell our terrific water to some neighboring municipalities that have a water problem. Most are across the river and we simply do not have the infrastructure to deliver the product. Do we want to invest in that infrastructure?

Do cuts in services help attract investors? Would people be willing to go to private garbage collection?

The point is, this annual budget dance (some years are easier than others) does not represent a systemic problem as much as it represents a new reality. Cuts, like tax hikes, only prolong the inevitable.  Cuts are a one-shot. Tax hikes are a one-shot. Eventually, you can't do either.

Got to love Troy politics. It's never dull.


Anonymous said...

Sorry Dem to bust your bubble but those municipalities across the river have their own water from their own reservoirs. The fact that Albany has offered Rennselear and the Greenbush areas water if they could agree to run the line under the river at a cheaper rate then Troy sells it to them is always a possibility.

Phana24JG said...

The revenue issue basically comes from the state contributions to municipal budgets remaining flat. In addition, unlike Albany and Saratoga county cities and towns, we do not generate the increased sales tax revenues they do from the various malls. When a substantial component of your revenue(currently about 40%) remains almost constant, and your expenses grow at rates higher than inflation due primarily to growing health care and public employee pensions, the outcome is inevitable. Simply look at pp 96-7 and 107 of the 2016 budget and see where over 1.1million comes from PD and FD fringes alone. There are some potential answers, but I have not found one major player willing to publically discuss them.

Anonymous said...

Did 'nice guy" Lou also mention that not only is he raising property taxes beyond the tax cap but the taxpayers of Troy will also lose their tax rebate check next year because of his incompetence. Just read that the average rebate check for 2015 is $200. So in 2016 when the taxpayers of Albany and Schenectady are getting rebates..too bad.. none for Troy taxpayers. What about that Lou or are you too busy driving around 24/7 in the city car with city gas. And sorry to say I think Madden will be worse. Lou 2.0. There won't be any more revenue next year and old Monica will be giving away the store. Great choice there, Madden. Can't sell your house. No one wants to move here. And by the way stop threatening the homeowners who pay the bills with loss of services. This is one life long dem who regrets not voting republican.

Anonymous said...

Has anyone ever considered "leasing" employees ?
If you did lease an employee then you would not be the employer and most likely would not have to assume certain fringe benefits such as "pensions". Just a thought worth passing along for consideration as my friend does it ion the private sector and it works for him in reducing his labor costs immensely.

Phana24JG said...

Great idea 12.31, but some guy actually looked at doing that many years ago. He was told that since the people would essentially be doing the same work as the existing employees, there is no way this would ever pass legal scrutiny in NY. The Taylor Law effectively hamstrings the use of any creativity or new ideas when dealing with public employees.

Anonymous said...

3% yearly salary increases are a thing of the past. The unions were offered 0's.

Anonymous said...

3% is cheap for us to pay for all those Heros.