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Home Government Speaking French: Mayor's Update: We've Got Shrinkage

Speaking French: Mayor’s Update: We’ve Got Shrinkage

Here is the next edition of Speaking French, the Mayor's Latest Update.

Shrinkageseinfeld

The Mayor says we've got shrinkage. What do you think? Leave a comment below.

Rye City Council Updates from Mayor Douglas French

November 29, 2011

A Primer on Taxes

As the City prepares to pass its budget on December 21st, the number one question the City Council gets this time of year from residents is: "I pay so much in property taxes – where is it all going?" As a taxpayer in Rye, the total property tax levy in 2011 was roughly $111M which breaks down as follows: $64.5M (58%) for Rye City Schools, $21.6M (19%) for Westchester County, $19.4M (17%) for Rye City Government, and $5.7M (6%) for Sewer districts. The portion for those in the Rye Neck School District is not included in this figure. The $19.4M for Rye City Government combined with variable revenues of $10M to include sales tax, mortgage tax, interest income, fees and State Aid make up the City's $30M total operating budget.

The Shrinking Revenue Pie

Two-thirds of the City Government budget is based on the property tax levy, but these are unprecedented times, as for the first time in decades, the filed assessed value has not only gone down — it has gone down 3 years in a row. With declining values, tax rates are increased just to collect the same amount of taxes from the previous year. For its part, the City has held the line on the property tax levy during these times. From 2001 to 2009, the property tax levy grew from $10.3M to 19.1M or an average increase of $1.1M per year. The last two years, the increase in the property tax levy averaged only $157k per year. In addition, variable revenues which make up the other one-third of the budget have dropped $2M or 20% since 2007. State aid is expected to be reduced as well. The overall revenue pie is shrinking.

The Shifting Expense Pie

While the City is holding the line on expenses, the make-up of the costs has shifted dramatically as employee benefits continue to grow at double-digit rates. This is not an indictment on our workers who have gone above and beyond this past year in maintaining the quality level of services we expect in Rye – during one of the most challenging years in terms of emergencies and service demands. It is a financial indictment on legislative decisions that have been made at all levels of government which have put the burden directly on the municipal taxpayer. Employee retirement expenses are growing at a rate of 18% or $363,000 and are governed through the New York State legislature and the New York State Constitution. Employee health insurance is increasing at a rate of $178,000 or just under 10% — primarily driven by the Federal Healthcare legislation which is driving up premiums passed down to local governments. All other costs for the most part are holding flat.

A Tapped Out Community

Unemployment, under-employment and significant drops in wealth are realities in Rye with no end in sight. The economic crash in the Fall of 2008 was expected to rebound a year or two later. Three years later we are looking at the likelihood of a default in the Country of Greece. The market forces continue to push down on a community whose residents are closely tied to the financial services market. The ability to pay is not there.

Managing and Transforming

Last year the City absorbed cost increases by transforming the organization through leveraging vendor contracts, reducing supervisory layers, and negotiating a fair and affordable labor deal. This year, the City is not budgeting for any new significant capital improvement projects beyond the ones that are already underway. The demand for City services has never been higher, and the Council and management team continue to gauge resident feedback. The Council will be making financial and operational decisions as to what capital improvements can be funded, how to maintain basic service levels, and where to identify new sources of funding. These will be very difficult decisions as the City Council balances the scope of the current government service footprint vs. the desires of the community for traditional programs and services. Public workshops are scheduled for 8 pm on November 30th and December 5th as well as a public hearing on the budget on December 7th. The Citizens Finance Committee will present their opinion during these sessions. Final adoption will be voted on by the Council on December 21st.

Mayor Douglas French

  1. This budget is an absolute disaster .

    All maintenance work for streets , sidewalks , curbs , etc is canceled and we are hit with a huge tax increase in middle of a horrendous recession anyway ? All to fund insanely generous worker pensions/benefits ?

    What will you do next year , Mr French when horrible markets leave you with another 20-30% increase in what Rye will have to contribute to their disgustingly generous retirement packages ? How long will all the homeowners stick around as their taxes soar upwards again while the roads fall apart so you can fund those gold plated worker pensions ?

    So what if its state mandated ! Why aren’t you slashing headcount ? Your voters are all getting forced to live on less but somehow Rye government is a sacred cow who must get more ?

    Ask us how many of us get a tax payer paid for bailout of for our 401-K !~

    How many positions have you privatized since taking office , Mr French ! Have you even looked at what the unfunded pension and health care benefits liability will look like in 5yrs ? 10yrs ?

    We need FAR FEWER TOWN EMPLOYEES and make up for it with private sector contractors who Rye will not have to wory about later with pensions and benefits .

    To the workers of Rye : ask yourselves this ? How long can Rye cancel all maintenance work on its roads and sidewalks to keep funding your retirements ? Don’t any of you realize we already pay the highest property taxes in all the Unites States in Westchesters and that piling on even more will eventually force everybody to move with nobody left to pay your retirement ?

    If i worked for City of Rye and was hoping to draw a retirement , i would be all for seeing work parceled out to private sector to protect my hopes of getting my retirement payments later on .

    This budget is everything wrong in USA today . Its pretending we will never need to repave a road again or fix a broken sidewalk so that our unionized workers support the politicians in charge by funding their retirements . Its the ultimate cop-out ” kick the can down the road ”
    plan .

    Its a plan designed to leave our kids with a town fraying around the edges , crappy roads , crumbling sidewalks , and still paying the highest taxes in the nation .

    I understand you have tough choices to make Mr French but then you weren’t elected to run a popularity contest .

    We have an out-of-control non-sustainable problem funding retirements for our employees whose union bosses have negotiated contracts that will never get paid out in full . We’ll need to see property taxes double in next 10yrs in Rye at rate the monster is growing and we all know you can’t double the highest taxes in nation and possibly work ( sorry Doug , but check out what happens when you compound increases at 4+% a year for 5-10yrs ) .

    A final note ? Housing is continuing to crumble in value / prices all 2011 and even the bullish folks in that business now concede there is easily another 8-15% of downside . Your tax base will drop again next year Mr French and your benefits costs for workers will be up 20% minimum . Then what ?

    Oh , and the mini-boom going on of multi-family units going up everywhere in Rye ? Thats like the final act in our death spiral .

    The property taxes off these 2-3-4 family units is a fraction of the cost to us taxpayers on all the children who move in to go to our schools . This explains why the school population keeps booming in a town where every lot has had a house on it for decades . Little 1 family cottages on Midland and Purchase go down and 2-3-4 rental units go up and the increased tax base is minimal crushing the schools with more kids but little new tax revenue .

    Great job Rye Planning Board !

    THis is why Rye is becoming nothing but one temporary living space for young families to move to for the schools and then sell your place and flee as last one gets out of high school to escape the insane taxes . But this means Rye real estate is becoming one big game of musical chairs as everybody keeps hoping there will be a greater fool to buy their house when they get ready to flee as the kids get older . Problem is ? with home prices now in a long term secular decline , that game is ending ….and ending badly for those still here in houses with big mortgages .

    …………….

  2. Speaking French – “We’ve Got Shrinkage.”

    Yes we do.

    And who knew?

    And this shrinkage has a real STAR quality.

    http://bit.ly/tut0T8

    Once again Heal the Harbor has advanced its exposure of the insider’s game in Rye, unearthing another apparent example of how the political class enriches themselves at the expense of the rest of us.

    Un-permitted, un-inspected and un-taxed substantial home construction is illegal. And STAR tax exemptions cannot be claimed on non primary residence properties. Yet apparently this behavior is kind of an open secret, snickered at among certain officials, comfortable in their belief that no one in their clique is accountable and that all issues can and will be papered over in time.

    And why in retrospect should they actually be concerned? No permits are required to destroy wetlands if you know the right people – FOIL laws are openly mocked, and the filth and safety hazards out on Hen Island remain. Fixers call the shots in secret, and most on this city council work to maintain a state of contrived ignorance about these and other huge unresolved matters. Trust, is on the wane.

    Influence and access unfortunately count for much these days at City Hall. As does a certain carefree “catch me if you can” insolence. This puts enormous personal stress on Rye’s mostly honest, long serving valuable public sector employees.

    What better antidote for their long suffering spirits could there be than a spotlight shined on the schemers, the gamers, the players and other dishonest actors who favor-trade voluntary public board service for a quiet special arrangement here or crony rigged ruling there? That’s where reformers come in – and Heal the Harbor certainly deserves much credit for its work here thus far.

    Perhaps given these new findings, and those I suspect are still to come, the beginning of the end of this dishonest self entitled cult in Rye is nigh. Honest citizens should I think however not break out the bubbly just yet.

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