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The formula for funding New York’s cities needs to be changed, and state mandates must be reduced, Rochester Mayor Thomas Richards said Monday in testimony to state lawmakers.
“To be successful in rebuilding Upstate New York, we cannot ignore its cities and their archaic revenue resources,” Richards said. “They are still the centers of economic and social activity. They are still where the people are and they are still where the needs are. Woe unto us if we try to succeed in Upstate New York by ignoring the cities.”
Richards was in Albany with New York City Mayor Michael Bloomberg, Yonkers Mayor Michael Spano and Syracuse Mayor Stephanie Minor to lobby at a joint hearing of the state Senate and Assembly on Gov. Andrew Cuomo’s 2013-14 executive budget.
Using property taxes as the primary source of revenues for cities is “an 18th century model that is incapable of dealing with 21st century realities,” Richards said.
Rochester’s pension payments have increased by $77.5 million over the last four years, and will be $52 million in the 2013-14 fiscal year, Richards said. That amount, along with the city’s state-mandated payment to the Rochester City School District, exceeds the city’s property tax revenue by millions of dollars.
“It’s not a matter of raising taxes,” Richards said. “A 2 percent increase in property taxes will produce a little over $3.2 million in a year in which we have a $28 million shortfall.
“If it weren’t for state aid and the sales tax that pays for everything else, we would have been broke long ago.”
The Cuomo budget’s proposal to stabilize pension rates could save Rochester as much as $21 million, with millions more to be saved because of the new Tier VI pension plan, Richards said.
Even as the revenue models for cities have become outdated, the demand for service by city residents has grown, he said.
“Rochester, despite its reputation and general circumstances, has some of the highest concentrations of poverty in the country,” he said. “Since those concentrations are in the cities, we are carrying the load for the whole region.
“If our citizens don’t get services from us, they don’t get them at all.”
A greater investment in cities by the state, including sharing in mandated payments to schools and their public safety costs, would protect cities’ investments in their schools, Richards said.
Rochester is required to pay its school district $119.1 million.
“The state invests billions in education in recognition of the needs of urban children as a result of the environments in which they live,” Richards said. “It makes no sense to continue to invest so heavily in the school system while allowing the communities in which the children live to deteriorate.”
Richards used his appearance before the Legislature to again ask for changes in the way per capita Aid and Investments for Municipalities funding is distributed.
City leaders repeatedly have said Rochester is shortchanged in AIM funding when compared to other upstate cities.
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