Just weeks after the Saratoga Springs City Council reviewed a new 2009 budget that shored up major spending cuts with a sigh of relief, the issue of budget shortfalls is back on the table.
Gov. David Paterson’s plan to save $5.2 billion over the next two years includes a 50 percent reduction in video lottery terminal impact aid, and Saratoga Springs is one of 18 municipalities statewide that collects millions from the program.
Currently $3.8 million in VLT aid was budgeted for next year. If Paterson’s plan goes through, it will leave the city’s proposed $38 million budget 5 percent light come mid-2009, assuming the money is left in. Taking it out will mean tax hikes or service reductions. A budget made up of a mix of the two scenarios could also be drawn up.
The City Council discussed the matter at its Tuesday, Nov. 18, meeting, after spending two days at the capitol lobbying for retention of the funds.
I wish we could report that it’s more optimistic than it may appear to be, but it’s not resolved as of yet, said Mayor Scott Johnson.
The council called on the citizenry to lobby and submit their input to the council by e-mail or phone.
`I think we all have to realize here in this community it’s going to be up to you all to also lobby your legislators on this issue,` said Commissioner of Public Safety Ron Kim. `I think we really need to pull together, not only as a council, but as a community. If our department is cut, you will feel it in things that happen out there.`
VLT aid is intended to help municipalities that host the terminals compensation for the costs associated with their presence, such as increased police patrols or infrastructure needs, according to Matt Anderson, a spokesman for the New York State Division of the Budget.
`We wanted to provide some advance notice to the communities so they could balance their budgets accordingly,` said Anderson. `We believe that the aid provided is not actually related in any way to the local municipality’s fiscal need or the cost incurred to the local municipality.`
City officials say that with a reduction in state police aid and flagging downtown tax revenues, the costs associated with the racino have increased as of late.
The city went to Albany with hat in hand in 2006, when former Gov. Eliot Spitzer proposed an elimination of VLT funding altogether. Intervention by former Senate Majority Leader Joseph Bruno helped keep the money in play, but Bruno is a resource the city no longer has.
Accounts Commissioner John Franck said that this golden goose was bound to stop laying eggs, and the city needs to acknowledge it.
`As I’ve said numerous times at the table, this shouldn’t be a shock to anyone,` he said. `I’ve been in the minority on this for the past three years.`
Franck feels that the city shouldn’t budget for VLT money; it would be a pleasant surprise if it arrives intact, but leaving a potential 5 percent of the budget in limbo strikes him as unwise.
`It’s a dependence issue,` said Franck. `The bottom line is, you have this event, and you have to have a response to it. If the response is to ignore it, you’re not going to get a good result.`
If VLT money is left out of the budget, it will have to be made up with a double-digit tax hike, service reductions or both, according to Finance Commission Kenneth Ivins. The current proposal calls for a 2.7 percent tax increase.
The city holds about $4 million in reserves that could also be raided. That could affect the city’s bond rating and ability to borrow money, though.
`Not only should we not touch it, we should increase it,` said Ivins. `All the city elders say that reserve should be at least $10 million.`
Paterson’s cuts will have to wait for approval from the state Legislature. A special session on Tuesday, Nov. 18, yielded no results, and it is likely lawmakers will wait until the governor submits next year’s budget before they take up deliberations. He’s expected to release it early, on Dec. 16, several weeks after Saratoga Springs must pass its own.
The council will hold a budget workshop on Monday, Nov. 24, at 6:30 p.m., at which time Ivins will present amendments to the budget and probably call for a vote to adopt one. The city may have the opportunity to amend the budget in December, as they must submit their tax rate to the county in January.“