Dead City Walking

Albany’s 2011 budget would cut more than 150 jobs and still raise taxes

Capital punishment refers to the death penalty.

Capitol Punishment—with an “o”—is the title of an auditor’s report stating that the city of Albany is not getting its fair share of state aid.

Whichever way you spell it, punishment is involved.

The budget ordinance that the Albany Common Council introduced unanimously on Monday would slash 155 positions and increase residential property taxes by 2 percent. Factor in the mandatory commercial-residential property adjustment, and residential taxpayers would be paying about 7.5 percent more in 2011 if the budget passes as is. Commercial property owners would see a decrease of almost 2 percent.

The owner of an average home valued at $150,000 would pay roughly $100 more in city property taxes in 2011 than this year, said City Budget Director Christopher Hearley. The city’s total expenditures would be just shy of $160 million in 2011, down from $163 million in 2010, he said.

Mayor Jennings compared the situation to a “financial tsunami” when he unveiled the city budget on Friday.

“I am presenting to you a budget that contains significant cuts in personnel, in programs, and in operating expenses in virtually every City department,” the mayor wrote in his budget address to the council. “All of these cuts, particularly in personnel, were difficult. But in the face of a nearly $23 million budget shortfall, our options were limited and my overriding concerns were to insure public safety and to not overly increase the burden on our real property taxpayers.”

The budget calls for 34 layoffs out of 1,400 city workers. The other 121 jobs to be eliminated are currently vacant. Altogether, there are 71 full- and part-time and 84 seasonal posts on the chopping block, said Hearley.

Employees who remain on the city payroll will get no raises under the proposed spending plan. For nonunion workers, it would be the third straight year without pay increases.

The city’s deadline for adopting a budget is Dec. 20. In the meantime, Albany Common Council committees will review the proposal, and the community will have a chance to weigh in during public budget hearings on Oct. 18 and Nov. 1.

The council still had not seen the Capitol Punishment report, prepared by the PFM Group, when the deputy mayor and budget director presented the $159.9 million budget to the council on Monday.

“When are we going to get it?” Councilman Anton Konev (Ward 11) asked. Deputy Mayor Philip Calderone’s answer: “Probably within the next few days.”

The mayor’s office is using the report’s findings to lobby the state to restore $16 million in lost aid.

If that were to happen, Jennings wrote in his budget address, “many of the cuts contained in this budget—particularly in the areas of public safety personnel, in youth programming and in support for the arts—will be restored,” and the city could avoid raising taxes, cutting services or eliminating jobs in the future.

Albany gets much less state aid per person than “comparable” cities, Jennings complained. Cities that receive more per capita aid include Buffalo, Syracuse and Yonkers, according to the deputy mayor.

Both men said that the city doesn’t get adequate compensation for being the state capital or having so much tax-exempt property. About 60 percent of the real estate in Albany is exempt, Calderone said.

State aid formulas are based on “political whims,” Jennings said. Cities that max out their borrowing are bailed out, but Albany is penalized for good management practices, he claimed.

Half of the rescinded $16 million came from AIM funding (Aid to Municipalities) and the other half was PILOT (Payments in Lieu of Taxes) funds for the Empire State Plaza. To make matters worse, income from sales tax and the city landfill dropped off, while operating and utility expenses climbed.

After reviewing the city’s four major departments, PFM concluded that there was “little low hanging fruit” left, and that there wasn’t much Albany could do “to cut expenses without compromising services,” Jennings wrote in his budget address.

The budget proposes using $6.1 of the city’s fund balance and $5 million of its debt reserves to help narrow its $23 million funding gap to $1 million. The remaining $1 million would be generated by the property-tax increase.

Proposed cost-saving measures include shutting down the Vincentian Institute teen center, ceasing garbage shredding at the municipal landfill, refinancing debts and selling property on Delaware and Central avenues.

There’s not much more the city can do to reduce police and fire spending without dramatically decreasing the quality of life in the city, Calderone said.

“People will die if you look at that as a way to cut expenses,” he said.

Councilwoman Barbara Smith (Ward 4) said at the Monday meeting that the budget was too hard on challenged inner-city families. She complained about the proposed elimination of playground personnel and closure of the bath house. Families are counting on their young people having summer jobs, and now those positions are in jeopardy, she said.

Albany resident Vincent Rigosu spoke of a retired friend whose wife is fighting her third bout with cancer. After shelling out his social security check and both pensions, his friend still couldn’t afford to pay his school taxes, Rigosu said. How is he going to pay his property tax and water tax on top of that?” he asked. “There’s so much waste in this city that we can cut.”

In this climate, things like live concerts on the riverfront and street mannequins are extravagant, resident Doris Coles told the council.

Former councilman Corey Ellis told council members they “should be ashamed.”

The city should stop running a golf course and a fleet of cars, he said, adding that the mayor and commissioners should shave their salaries by 20 percent.

During Monday’s budget presentation, 11th Ward Councilman Anton Konev asked if Albany has looked into a volunteer firefighting force, versus the current paid department. In a press release, he suggested several other ways of reducing spending and generating money.

One was to save on salaries by cutting the Common Council from 15 to 7 members. Another was for city administrators and council members to sacrifice 10 percent of their public salaries for the sake of constituents. Furthermore, he asked them to give up the $1,400 they receive if they opt out of the city’s health insurance program.

Privatizing or selling the municipal golf course could generate a $2 to $3 million windfall, Konev estimated. In a phone interview, he portrayed golf as a rich man’s game that most city residents cannot afford to play.

The money saved by such measures should be used to eliminate the need for a tax increase, he said, and could restore perhaps half the jobs that are at stake, by his calculations. He emphasized that the city should make sure that minority positions are not disproportionately targeted, he said.

Roughly $70 million of the preliminary budget is “pretty much untouchable,” Hearley said. Unavoidable costs included emergency services, debt payments, insurance, street lighting and pensions, he said.

Employee health insurance costs have doubled over 10 years, rising from $13 million to $25 million, according to the mayor. The budgeted pension contribution has increased from $350,000 in 2001 to almost $13 million today. The city must come up with an additional $3 million for pensions next year. Pensions, which were negotiated seven years ago when the economy was flush, account for one of the city’s highest contractual expenses.

In the future, Calderone warned, there will be a similar, if not larger, gap between revenue coming in and money that the city is obligated to pay out. “The challenge that we’re going to face in terms of the city’s need to balance its budget is still going to be there as we go forward into the next year and beyond,” Calderone said.

“It kills me that we have no money for economic development,” he said, and no “money left over to deal with blight.”

—Laurie Lynn Fischer

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