Governor pitches $59M of sales tax revenue for municipalities hit by AIM cuts

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Hempstead Town Supervisor Laura Gillen, right, with state Senate Majority Leader Andrea Stewart-Cousins in Albany Monday. (Photo courtesy of Twitter)

By Janelle Clausen and Jed Hendrixson

Gov. Andrew Cuomo released a proposal to give municipalities affected by cuts to the Aid and Incentives to Municipalities $59 million worth of funding through the implementation of an Internet sales tax on Friday, roughly equivalent to how much they would lose under the proposed changes to AIM.

The news follows mayors and local government campaigning for the reversal of the cuts, citing how critical they are to local governments providing an array of services while noting the aid is a very small part of the state budget.

Cuomo has proposed slashing more than $16 million in aid to villages and more than $42 million in aid to towns statewide.

Area villages would have lost $1 million, with only two of 29 retaining any funding, while North Hempstead was slated to lose $1.02 million and Hempstead would have lost almost $3.85 million.

“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,” Cuomo said. “This is why we are revising the executive budget to use Internet sales tax revenue to make these impacted localities whole.”

The state plans to implement the internet sales tax sooner, starting June 1 rather than the originally planned Sept. 1, to fund the $59 million that would’ve been lost.

The tax is expected to generate $390 million in revenue.

But the move is, technically, not a reversal of the proposed cuts. Instead, counties – including Nassau – would be responsible for divvying up sales tax revenue equivalent to what was lost to the villages and towns.

Peter Baynes, the executive director of the New York State Conference of Mayors, said this imposes a “new mandate on counties to make up” for the cut in aid and “will only further harm New York’s already overburdened taxpayers.”

“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,” Baynes said.

Baynes said he is optimistic, however, that legislators could restore the AIM funding and even increase it.

“I think because of the proposed elimination and the uproar it’s created throughout the state, I think state legislators have a greater appreciation now for AIM funding,” Baynes said.

If legislators were to stick with the governor’s proposal, Baynes said one of the difficulties would be creating a greater temptation for counties to reduce how much money they share.

“It diminishes the chance they’ll want to share any other portion of the sales tax if they do,” Baynes said. “Nassau County and Suffolk County are two of the counties that are notoriously not generous with their sales tax.”

Floral Park Mayor Dominick Longobardi, whose village received $270,822 in state aid last year, described it as a “nice gesture,” but not a full restoration of the original AIM funding.

The law would leave it up to the county whether or not to deliver the revenue to the villages, Longobardi said.

“The reality is we’ve still got a very far way to go,” Longobardi said of the funding, adding that “we still have no idea where we stand.”

At a press conference last month, Hempstead Town Supervisor Laura Gillen had ordered the town’s 28 departments to cut five percent of discretionary spending to prepare for the town’s expected $3.8 million aid cut.

Consequently, Gillen said on Friday, the change is still good news.

“I want to thank Governor Cuomo for working with the Town and restoring $3.8 million dollars’ worth of vital funding for essential services that our residents rely on,” Gillen said. “Hempstead Town would have taken the biggest hit out of any other municipality in the state; therefore, restoration of this funding has been my top priority.”

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