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How Albany could help

Some people may have greeted state Comptroller Thomas DiNapoli’s report on the city of Rochester’s fiscal challenges with a shrug, dismissing it as old news. Indeed, the basic facts outlined by the comptroller’s office have been reported before-and the bottom-line message has been delivered on a number of occasions by Mayor Thomas Richards, among others.
This does not mean, however, that Mr. DiNapoli’s report has no value. The comptroller’s analysis brings useful clarity to the city’s fiscal situation.
Rochester’s situation is not unique, but even among its financially strapped upstate peers, the city faces particularly difficult challenges. A key one is its poverty rate: At 25.8 percent, Rochester has the highest rate of families living in poverty in New York, where the statewide average is 10.8 percent.
In addition, the real property tax for several reasons supplies much less revenue to city coffers than among all cities statewide, and thus Rochester must rely more on volatile sales tax revenues.
While forces impacting Rochester’s property tax base are largely beyond the control of elected officials, one big fiscal factor is determined in Albany: the per capita aid Rochester receives. As Mr. DiNapoli notes, the city receives $419 in Aid and Incentives to Municipalities per capita-but the other three Big Four cities average $566 per capita. If Rochester’s share of this aid equaled that average, it would receive $31 million more annually. This would go a long way toward closing the recent budget gaps the city has been projecting, the report states.
In a statement on the report, Mr. Richards said it "tells the story we have been telling for some time-that we are doing as well as we can, but we are struggling to keep up financially." The city has taken a number of steps–from reducing capital expenses and reducing employment to revising its health care agreement with unions–to shrink its structural budget gap. Yet it still faces a budget shortfall of nearly $30 million.

Despite its challenges, Rochester is, as the mayor notes, a vibrant city-one making considerable strides in its revitalization efforts. But clearly, the job is made much more difficult by Albany’s failure to distribute funds equitably.

3/8/13 (c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.


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