Taxing, Spending and Cutting in Monroe County -- 19 September 2003
>> Coming up on "Need to Know" my taxes are too high my streets
are not getting fixed, my company can't afford to do business
here all common complaints against local government and they
almost always have something to do with money.-
We are going to look at how Monroe county has ducted its
finances and how candidates to be the next county executive my
manage money in the future and we will have the latest edition
of the business section with the Democrat and chronicle on the
way on "Need to Know."-
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[Captioning Made Possible by the U.S. Department of Education]-
(For "Need to Know")-
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>> Thanks for joining us.-
I'm Michael Caputo.-
Journalists have a mantra when covering stories, and that is
why should you care.-
When it comes to how government taxes spends and cuts programs
the answer is easy.-
Go to Canandaiga, policies that have cut taxes and cost of
paying for the war on terror are forcing cuts like the V.A.
hospitals in the region.-
Go to Greece where they lettingened the distance children have
to walk to bus stops as part of a way to save $8,000,000.-
People were not happy with the cuts.-
We will look at how jack Doyle has handled the finances of
Monroe county the last nine years.-
That means looking at three things.-
What is the low property tax increase policy meant.-
What was the last raise in taxes, sales tax sustain the county
budget and we will discuss the connection between taxes and
jobs.-
First we are going to hear a little from two people who want to
be county executive.-
We asked Republican magazine ji brooks and Democrat bill
Johnson.-
Has the flat property taxes worked.-
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>> The current administration has in some senses kept our
community recession proof if there is such a thing.-
I think that the long-term commitment to stable property taxes
has been an important one for our community because any time
you look at the overall economic health of a community, when
you start raising taxes you put all kinds of obstacles in your
way when you are talking about attracting jobs and
opportunities.-
So, I think from that perspective the administration has done a
responsible job of maintaining the economic health of our
community.-
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>> Whatever tragedy they had initially, has boomer ranged or
backfired because they failed to keep their revenues in line
with their expenses.-
To promise a tax cut or to hold a tax flat in boom time is not
rocket science.-
People can do that.-
But as we, as our economic climate changed for the worse, as
our revenue streams were being reduced, then it required a
review of that strategy.-
What I found is that this is more ideology and mantra than
sound fiscal and prudent management.-
It sounds great.-
"I'll never raise your taxes."-
But when you continue to run deficits, when you exhaust all of
your reserves, when you begin to sell off valuable assets just
to generate cash, to balance the books, then you have to give
up ideology.-
If you truly care about the future of this community and what
they have done is literally bankrupt this county.-
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>> With us in the studio to talk about taxing, spending and
cutting in Monroe county are people with a good background in
financing.-
Two ledge later in office much of the Doyle administration,
Republican Dennis Pelletier of ago again also the legislative
president and Christopher Wilmot of Rochester the assistant
minority leader.-
Also former RG&E C.-
O. Tom Richard a member of the blue ribbon commission that
studied the size of the deficit a year ago and came up with
recommendations for keeping away from a deficit in the coming
years.-
I want to thank you all for being here.-
I would like to start with the policy that the administration
and in essence the county legislator followed the last nine
years on property taxes.-
I guess in essence what happened is the amount of money
collected -- tell me if this is too simple, but the amount of
money collected by Monroe county government has stayed the same
over those nine years.-
Meanwhile, the amount of value of property in Monroe county has
gone up from somewhere around $23 billion, $24 billion to $30
billion so to keep the amount the same you have to lower the
tax rate.-
Richard what did the commission say about that?-
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>> I think that the commission said that with respect to the
rate and levy analysis which you have given correctly, you
should hold the rate flat but not try to hold the levy flat.-
Here is why.-
.-
As sort of taxing policy issue.-
To a large extent if you hold the levy flat and that is an
heroic effort and they are to be congratulated for it.-
But the problem about it over the long run is the costs
continue to go up driven a substantial amount by inflation, the
regular cost of doing government.-
If you don't capture some of the increase in property values,
then you have got a situation in which you will have to cut
every year just in order to hold stable, unless you have some
other source of revenue.-
Another thing to remember about the property tax is to a large
extent this battle about the property tax, it is important, is
not the really most important.-
Property tax raises I think about $235 million.-
The county spends about a billion dollars.-
The smallest part of everybody's tax bill is the county tax.-
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>> You are saying that because there's a town tax involved and
school tax -- -
>> In the suburbs your property tax is driven largely by
schools and in the city driven largely by the city tax which
includes the schools.-
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>> You call that a heroic effort.-
Was it to keep the property levy the same all those years?-
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>> Obviously it was not easy.-
And when I first came in to the legislator I think we had a
$9630 million and last year it was $914.5 million.-
We have been able to cut spending through innovative ways,
private advertised some of the golf courses and other things we
had.-
And obviously we have had to tighten our belt to make up -- -
>> What is the theory behind keeping the levy the same?-
That was truly the way that jack Doyle wanted to present it.-
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>> It truly is not a tax increase if you keep the levy flat.-
We actually reduced the rate is what Tom is talking about,
because the growth in the assessed value was passed on -- -
>> You cut taxes.-
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>> We cut taxes.-
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>> The effect was a reduced rate.-
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>> Exactly.-
And I don't know what it is now, but I think it was like almost
8.50, maybe down to 8.30 now.-
But like says, $235 million has been the same and it has been
the same amount that we have been collecting for a number of
years.-
You can argue whether or not that is the right thing -- -
>> Why was it the right thing?-
-
>> Let's look at some of the statistics.-
Monroe county is one county that had a growth in population
versus all the other surrounding counties.-
We think mart part of that may have been the fact that the
property rate was stable and not growing.-
If you look at, around the county and -- excuse me, around the
state -- some counties had 35% tax increases.-
We were one of the few if not the lowest in the entire state
because we all have the same problems, the mandates, cost in
Medicaid, cost of healthcare and they are going at double digit
and you have to be creative to not have a tax increase.-
You can raise taxes but we decided to address some of the
issues, consolidate.-
Make government more ever an pass that on to the taxpayers.-
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>> I was proud to be part of a bipartisan coalition last fall
that negotiated a are a budget where we saw a modest 2 1/2% tax
increase.-
Compared to a lot of counties, we certainly held our tax
increase in line.-
Some counties, New York City for instance had an enormous
increase, I think 18%.-
Mayor bloomberg was saddled with that.-
But the point is we are swimming in the, or againsted tide.-
This one of the few counties that saw an increase in
population.-
The two biggest neighboring counties in western New York so
decreases.-
But the fact is the high cost of government here is catching up
with us.-
We have traditionally been a wealthy and rich manufacturing
county and region.-
But the fact is we are hemorrhaging jobs at a fast pace.-
And we can't substantiate and put up with as taxpayers the
levels of government and expense of government and that's what
the rump group said that Tom of was part of and romp business
alliance was instrumental in putting forward.-
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>> Part of the reasoning, too, by the Doyle administration was
we've got to keep businesses, we've got to draw businesses.-
Everybody else in New York state including New York is raising
taxes.-
We've got to make a good faith show to cut taxes.-
How could you argue against that?-
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>> Against cutting taxis?-
How could I -- -
>> How could you argue against the Doyle administration's point
of view of we've got to cut our taxes in order to keep business
here, in order to aat that particular time business.-
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>> I think this is where Tom was going.-
By keeping the rate the same because of the growth in property
values over a 10-year period or whatever period the levy would
have increased if we kept the rate the same.-
That is not necessarily an irresponsible way to go.-
I'm not necessarily criticizing the Doyle administration or
Republican majority in saying we not only to keep taxes flat
but decrease them because this is a high high taxed state.-
New York has a number of problems with high labor cost, high
union activity.-
High taxes, high property taxes and we don't grow jobs like we
once did.-
In fact the rump group says 37% of 18 to 21-year-olds are
considering leaving upstate New York, 36% of 22 to 30-year-olds
are considering leaving the state in a short period of time.-
This is zrass trust in terms of providing the services that the
county government needs to provide lowering the tax base and
trying to keep taxes flat.-
Something has to bust.-
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>> Let's put this in perspective.-
I certainly don't advocate and the commission that I was
chairman of or group don't advocate increasing taxes.-
What we were saying is if you kept the rate flat, the levy, you
would have gotten additional funds without increasing the
rate.-
That's what people focus on.-
All of the discussion in every other government and place,
these places where they are talking about raising the rates,
that's what you would folk on.-
So you wouldn't have to increase the rate because you wouldn't
get behind.-
The issue for the county today is we are behind.-
We rap a big deficit last year.-
We have a $28 million or so operating deficit in the previous
year.-
Now that is being taken care of by things that are largely
one-shot arrangements.-
Borrowing, sales of property.-
That runs out.-
When that runs out and it is pretty much gone now, then you are
going to have to make some very hard decisions.-
And those very hard decisions I don't think can be solely dealt
with by raising taxes.-
You cannot raise -- -
>> Can we sustain no increase in the levy?-
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>> Well, there in lies the philosophical differences, I think
that the Doyle administration and Maggie brooks is articulating
the fact that she wants to continue with no property tax
increase.-
You ask can that be done.-
Well, nobody thought you could consolidate the human service
and social service department and save $30 million and it looks
like you are going to be able to do that.-
No one thought you could privatize the parks and make money or
pay less.-
We did that.-
I think that there are still innovative things we can do.-
We can consolidate with other governments, continue to work in
that regard.-
Cross sharing of purchasing, things of this nature.-
Monroe county leads any other county in the state and I'm first
vice president of New York state association of counties right
now, and they are amazed that we don't have a highway
department, that we have our towns do those things.-
They are just placed that we cost share the 911.-
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>> I think that there is still areas that efficiencies and
savings can be made and I think that the easy thing to do is
raise the taxes.-
The tough thing to do is to cut the costs.-
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>> Dennis and I agree more than I think he thinks.-
Up like last year when we had social service agencies that were
about to die who were providing very needed services in the
community were about to go out of business, we did a bipartisan
budget that said let's float them along another year until they
consolidate or figure out other reduce.-
I won't vote for a tax increase this year.-
We are not as philosophically different as he things.-
We have to cut the cost of government.-
I'm a Democrat who believes in making government smaller.-
It is a libertarian philosophical and a conservative volume.-
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>> If nobody is going to vote for a property tax increase I
would like to bring up a chart quickly.-
Last time we had a deficit situation we had, we went to the
sales tax and raised this from seven to eight and for the first
number of years, the first year alone I think it more than
doubled.-
You got a lot more revenue in hand.-
The last five years I think we saw a few million dropoff in the
sales tax.-
I will ask this and maybe everybody will laugh at me.-
Is the sales tax an option at this point?-
Should the sales tax be considered?-
You are shaking your head no.-
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>> With respect to taxes particularly the sales tax is the
easiest to understand because you have to be conscious of your
competitive position.-
And if Monroe county raises its sales tax high are than the
counties around it people won't do business here.-
We don't have total freedom to raise the tax because the
consequence of that is that you begin to lose revenue because
peel go somewhere else.-
Ontario county has less sales tax than we do right now and
there's a lot of business being done there, retail business.-
So, we have to be very careful about what our options are.-
I think to tell you the truth to some extent this argument is a
little bit of a red herring about raising taxes.-
Even if you are in favor of it you can't raise taxes enough to
deal with the fiscal challenges we have.-
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>> So you have to cut.-
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>> You have to do it no matter what.-
So if you say I will never raise taxes or that it should be
part of it you have to deal with this problem and that's what
we ought to.-
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>> You have got to cut.-
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>> I don't think raising the sales tax is the way to go.-
But I will say in New York state this year 39 counties have
asked for a sales tax increase.-
A lot were maybe at -- 39 counties asked for an increase.-
In sales tax to help them with really I think beyond their
control the cost of Medicaid, the cost of prescription drugs
and things of this nature.-
And if it happens in the middle of a budget year, you
anticipate so much growth and it could be double what you
anticipated.-
Now you are looking at a 10 or 15 million dollar shortfall just
because the figures are coming in high are than what you
anticipated and the state is constantly improving the programs
and opening them up and enabling more people to become Eligible
for the programs like hicra and these are killing the
counties.-
And moodies has said that.-
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>> Mike, it is also, I give the Doyle administration and
Republicans some credit.-
Cancel dating some departments is good.-
After all of this streamlining and consolidating we have not
gone far enough.-
We have the third highest property taxes in the United States.-
But we are not a Phoenix or an Orlando or Charlotte.-
We can't grow out of the recession locally unless we massively
consolidate local government and take a hard look at what are
we doing wrong.-
Why are people moving from New York state and western New York
and it is taxes and lack of jocks.-
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>> You have to look at consolidation and what that will do.-
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>> Let me go to something because I want you to take a few
seconds to comment.-
The two candidates running for county executive talked about
the relationship between taxes and jobs.-
Take a listen.-
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>> I think -- I don't think it is the only decision and the
only factor.-
After all the New York metropolitan area, the long island
metropolitan area are the only growing parts of the state.-
They have the highest tax burden.-
And businesses are still there.-
People still move there.-
People expect to get value for that tax.-
That is the big issue.-
What are you getting for your taxes?-
And I think that if we were to frame the argument in that
fashion people would be less resistant.-
We have to lower our taxes.-
We have to -- we have the highest local tax burden of any state
in the union.-
It is well beyond reason.-
But there is a reason for it.-
We have too much government.-
We have too many levels of overlatching and repetition.-
And I find it amazing that the same people who say they don't
want to raise taxes are also the leading resistance to reducing
the level of government and making government more efficient.-
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>> Taxes, the number one issue why businesses won't come to the
area and New York state in general, we are overtaxed.-
Our residents -- we go to their pockets more than we should.-
And it is time that we just take raising taxes off of the
take.-
We need to stimulate the economy through creating jobs and when
we do that we are really cutting down on the amount of services
that, social services that we have to provide because there are
more jobs and opportunity for everyone who lives here.-
And we bring more sales tax into our community, which again
makes sure that we are stimulating and continuing to grow our
economy.-
Raising property taxes does a number of things. It chases
people and business from our community and we've got to top
looking at ways where we can get more and more from you're
taxpayers.-
It is a short-term fix that doesn't do anything to move us into
the future and when you continually say I'll just raise taxes
and take care of the problems, you are admitting that as a
government you don't have to be challenged to go out and be
innovative and try to be smaller and smarter.-
So, I'm totally against the concept of raising taxes.-
-
>> Mr. Richards, does taxes play a role and if nobody talks
about it how are you going to make enough cuts to get to where
we need to be?-
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>> Taxes certainly play a role in business' perception and in
the reality of what it is that costs them to do business in New
York.-
It isn't just property taxes.-
In New York, it has a lot of taxes in all kinds of of areas.-
Sometimes property taxes for some businesses are not that
important.-
It depends on the nature of the business.-
That is why I think the comparison to New York City is not
particularly applicable because the type of business that
drives New York City is very different than the kind of
business that drives here.-
The tax impact on Merrill lynch, for instance, is much
different than the tax impact on Eastman Kodak because of the
nature of their business and we have to appreciate attachment
second, equally as important is the perception that New York is
a tough place to do business.-
It is highly regulated.-
Very bureaucratic, a difficult place.-
To some extent in both of those cases the perception exceeds
the reality, but it doesn't matter because New York has got
that reputation now.-
And it has to do some things to get rid of that reputation.-
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>> Gentlemen, I wish I had like 30 more minutes because I think
we could talk more about this and maybe we will have to do that
in the future.-
I appreciate your being here.-
This continues on the web.-
We want you to write us any time at wxxi.org/ntk or you can
email us at needtoknow@wxxi.org.-


Now let's turn to the business section with "THE DEMOCRAT AND CHRONICLE."

With us is Ellen rows enbusiness editor for the Democrat and
chronicle.-
Hi.-
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>> Hi.-
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>> Let's talk about Kodak and their latest announcement about
healthcare costs and employees.-
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>> Yes, they came out this week with their 2004 employee
contributions, the health plan.-
Basically as we know the cost of healthcare is going up and
they have decided to pass an increasing share of that increase
on to employees.-
For instance if you look at the most popular plan, the family
plan, it will go up for co-pay, something like 47%.-
Along with that their co-pays will go up every time they see a
doctor, prescriptions go up every time they get a
prescriptionment so the question is really this is a trend we
are seeing with Kodak being the biggest employer will that
influence other employers.-
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>> They went self-insurance.-
Wasn't this supposed to save?-
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>> It was and they say it does.-
If it wasn't for self-insurance which means they only take a
risk with their own employees they say the cost would be high
are.-
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>> What Kodak does is a bellwether thing for others in the
town?-
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>> It often is.-
They are the largest employer and a lot of other companies are
looking at the same situations.-
They are facing the same increase in cost so the company
decides if Kodak can do something like this then other
companies say maybe that's the way to go.-
It is interesting too because there was a study last week that
said the average two-income family has less buying power than a
single income family in 1970 and one of the largest reasons is
health cost.-
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>> Let's talk about barb and home.-
They say -- there was another bit of news that their pure
vision and patent battle in Europe.-
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>> Yes, there was a suit against Kodak and both there and here
regarding pure vision.-
The rule is that bosh was infringing and can't sell here until
25.-
But the European court struck down the patent and said they can
resume.-
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>> This means -- what does this mean about pure vision in
Europe?-
They will be able to market?-
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>> They will believe able to market and sell.-
A lot.-
Production was moved from Rochester to there so they can do
that.-
This is a very big market.-
They still don't have the U.S. market and there are more suits
pending that may extent Novartis' patent to 2014.-
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>> So this has -- separate court, separate country, separate
kinds of patent law.-
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>> Tell me a little bit -- a lot of news about either mergers
or changes within the merger news I think was the news unity.-
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>> Group that was recommending merger decided to tell the
boards of the two health systems to look further and now they
have to see if they can come to an understanding or memo of
agreement.-
What they are recommend something what the consultant
recommended which is Tim McCormick take over as head of the
merged group and Sam Houston who is probably due to retire is
C.O.O. and head of the board becomes the head of the new
board.-
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>> You had a very interested article about emergency rooms and
number of space, I guess, really the word is space.-
We have lost general necessary see.-
St. Mary's has done we with its emergency facility.-
The article talked about the growth in other hospitals.-
Tell us about that.-
The construction going on.-
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>> A lot of other hospitals have had to bid because we had a
lot of code red and other things where emergency rooms were not
equipped.-
Medicine care has taken a different turn and there are
different needs in the emergency room so they are building and
expanding.-
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>> Tell us about what we will see on Sunday.-
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>> This Sunday Michael wenzel looks at what it takes to start a
vineyard.-
The wine business is one of the areas that the region is
looking for economic growth.-
We are looking at what it takes to get a winery started, buy
the land and get it to market.-
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>> What do does it take?-
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>> A lot of time and a lot of money.-
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>> What we are talking about is somebody who has made a million
maybe, won the lottery then start?-
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>> No, a lot of it is borrowed but you are in depth for a --
you are in debt a long time and working 24 hours and seven days
a week.-
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>> We have a lot of places where they can develop.-
Thank you.-
If you are interested in learning about other issues you can
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Go to channel 709 and find back "Need to Know" broadcasts.-
Next week on "Need to Know" drug addiction, they are becoming a
problem of senior citizens.-
Agencies are taking the growth of senior drug abuse seriously.-
We will explore that next week.-
Please join us.-