In a last-minute move pushed by Mayor Shayne Gallo, the Common Council on Tuesday night passed a resolution calling on state lawmakers to convene a special session to restore the county’s full 4 percent sales tax. The resolution passed after Gallo addressed the council to warn of dire fiscal consequences if the state Assembly, now in summer recess, failed to act to restore a 1 percent extension of the tax.
What Gallo described as a “crisis” comes in the wake of a standoff between County Executive Mike Hein and Assemblyman Kevin Cahill over the Safety Net welfare program. Unique among New York counties, Ulster places the onus of funding the program, which provides a small cash benefit to those who have exhausted all other public-assistance programs, on the municipalities in which recipients reside. As a result, Kingston and a few other communities with a large proportion of low-income residents have to deal with far greater Safety Net costs than better-off towns.
Earlier this summer, Cahill forced the issue when he blocked a home rule request renewing the 1 percent extension of the sales tax unless county lawmakers and Hein committed legislatively, to an earlier proposal from Hein for the county to take over Safety Net gradually over the next three years. (Ulster County is technically authorized to levy a 3 percent sales tax alongside the state’s 4 percent; the 1 percent extension was first enacted in 1993 and reauthorized by the legislature every other year.) Cahill, who also wants the county to take over the cost of running elections from municipalities, has said that he expects the Assembly to convene in September to take up the request, but only Gov. Andrew Cuomo has the authority to call the legislature into a special session. Hein has warned that if the request doesn’t make it through, the county stands to lose millions in tax revenue.
A grim picture of a fiscal tailspin
In his address to the council Tuesday evening, Gallo painted a grim picture of the consequences if the Assembly fails to act. According to Gallo, the loss of the 1 percent extension for one fiscal quarter would cost the city $750,000. If the tax is not restored for a full year, the city would lose $3 million. (By way of comparison, the city levied over $15 million in property taxes to partially fund the $36.8 million 2013 city budget.) Gallo warned that layoffs could start as early as Dec. 1 and eventually lead to the dismissal of 40 city employees. The layoffs, he said, would create a fiscal tailspin with the city on the hook for millions more in vacation accrual payouts and unemployment benefit costs.
“We will literally be $5 million in the hole if we don’t get that extension,” said Gallo.
The council passed the non-binding resolution 8-0. (Alderman Matt Dunn, D-Ward 1, was absent) but not before Elisa Ball (D-Ward 6) added an amendment expressing support for the county’s takeover of Safety Net costs. Majority Leader Tom Hoffay (D-Ward 2) who works in Cahill’s Kingston district office, rose to point out that the resolution did not target Cahill or any other politician but merely called for the maintenance of the sales tax extension. Gallo meanwhile expressed cautious optimism that the Assembly would indeed reconvene to pass the home rule request.
“We need to send a signal to let our assemblyman know this is a crisis,” said Gallo. “I don’t think he wants that as his legacy after all of those years of good service.”
Cahill could not be reached for comment before press time.
Also at Tuesday’s Common Council meeting:
- The Council unanimously approved a request from Gallo to pursue $4.43 million in state grant money for a number of projects. The requests, bound together in the Consolidated Funding Application, or CFA, are spread over eight separate grants. Five of the grant requests and the bulk of the money would fund “connectivity projects” linking the city’s rail trails and creating new bike lanes and streetscape improvements to make city streets more bike- and pedestrian-friendly. Another $100,000 grant would be used to create an added incentive for private investors to redevelop the former site of a municipal parking garage in Uptown Kingston. The grants call for a local match of nearly $2 million. But the plan calls for the entirety of matching funds to be paid from complementary grants. An amendment added by aldermen calls for all grant requests to go back to the council for final approval in the event the matching funds are unavailable.
- The council approved the sale of six surplus properties — 19 Tenbroeck Ave.; 146-150 Wilbur Ave.; 138-140 Prospect St.; 46 Maple St.; 225 Abeel St.; and 9 Alcazar Ave. — currently held by the city for nonpayment of taxes. Alderman Bob Senor (D-Ward 8) objected to the sale on the grounds that none of the agreements contained a reverter clause to allow the city to take back the properties in the event the new owners do not follow through on commitments to renovate, or in one case demolish, dilapidated structures. Corporation Counsel Andrew Zweben said that the reverter clause was unnecessary since all of the purchase agreements already including binding language requiring the new owners to fulfill their responsibilities.
- The council unanimously approved a $1.25 million bond resolution for the Water Department to replace three deteriorating water mains near the CSX tracks in Midtown Kingston and repaint a water tower on Florence Street.