Lack Of Suggestions To Fix City’s Finances Is A Story We’ve Heard Before

Everyone knows Jamestown has financial problems.

No one knows how to fix them.

The latest example is a report released earlier this week by state Comptroller Thomas DiNapoli focusing on the increasing number of municipalities nearing their state constitutional taxation limit. Jamestown is the only municipality to have exhausted its constitutional tax limit, but several other municipalities — including Lackawanna, Allegany County and Niagara Falls — are poised to join the exclusive club within the next few years unless things change.

While the comptroller’s report does a wonderful job documenting the issue and explaining the constitutional taxation limit, it is short on ways the municipalities can get themselves out of the mess they’re in.

In Jamestown’s case, as we have reported ad nauseum in the past, the city finds itself boxed in by a series of bad decisions and poor circumstances. Employee contracts agreed to long ago make it nearly impossible to right-size the city’s workforce, tax-exempt status of large swaths of the city make it difficult to add to the city’s tax base and the state Public Service Commission has made it difficult to increase revenues by using the city Board of Public Utilities profits. The city has wrung excess spending out of the budget in recent years, cutting funding for anything that is not mandated. If it weren’t for three years of $1 million funding allocations from Gov. Andrew Cuomo, Jamestown would be bankrupt.

We’re sure Mayor Sam Teresi’s final budget will be another that makes no one happy. There is little left to cut, employees who want to be paid more, departments that need more money to operate effectively and taxpayers crying out for tax relief. Yet the best advice from the Comptroller’s Office regarding the city’s exhaustion of its constitutional taxation limit is to send the city’s budget and constitutional tax limit calculation early enough for the Comptroller’s Office to review them before a budget is adopted.

One suggestion, not that it really helps taxpayers, would be for the Comptroller’s Office to advocate for a change to the way the constitutional tax limit is calculated. Increasing tax assessment is a struggle in many areas, Jamestown included, so perhaps the formula can be tweaked since state law ties the city’s hands when it comes to cutting spending.

Perhaps the state could take a harder look at property tax exemptions. One of Jamestown’s underlying issues with the constitutional tax limit is the 7,010 parcels that have one form of tax exemption or another totaling $420,055,316 in potential city tax revenue, according to the city’s 2019 assessment rolls. In addition to the bottom-line revenue lost that has to be made up by taxpaying entities, the loss of taxable assessment hurts the city in the constitutional tax limit calculations each year. Greater limitations on tax exemptions could help some taxpayers while helping the city’s overall financial position.

There is no cutting the city budget without spending less money on salaries and benefits. The state’s $1 million in additional state aid for the past three years is welcome, needed and appreciated, but the best thing the state has done in the past several years is give the city financial assistance to begin moving retirees off of the city’s health insurance plans and onto private plans. The biggest help the state can give would come in the form of assistance with renegotiating employee contracts. Until the city has the ability to either shrink the city workforce or better limit what the workforce makes, Jamestown’s financial problems will never end.

COMMENTS