Albany's Budget Boost Has Strings Attached

ALBANY, N.Y. — A state-sponsored windfall for the city of Albany appears to come with some strings attached.

Last week, Governor Cuomo promised $12.5 million in his 30-day state budget amendments, to help Albany close a massive budget gap. In the language of the amendment, newly released, the governor ties the money to Albany's ability to build fiscally sound budgets, without special funding from the state.

Albany Mayor Kathy Sheehan has requested that sort of funding several times during her first term in office, claiming her city is uniquely qualified to receive such funding due to a glut of state-owned properties that are exempt from property taxes. Former mayor Jerry Jennings often made the same plea before Sheehan's time.

This year, Sheehan had requested a five-year funding plan from the state, at roughly the same annual rate ($12.5 million), while the city works to grow its privately-owned tax base. But the governor made it clear in the language of his amendment, that the state's ability to help has its limits.

Cuomo's amendment states that while Albany enjoys the help in 2016, "the City will be required to develop a comprehensive, long-term financial plan, structurally balanced without reliance on continuing special state assistance."

The amendment does not specify whether further aid will be coming, though Sheehan plans to request it again for 2017.

"In a city where the state is the largest single property owner, it's a challenge," she said Monday. "Is this the ideal solution? Absolutely not. This is not what we asked for. But I'm appreciative of the fact that the governor is listening."

The $12.5 million is repeat of about a dozen payments made to the city during previous mayor Jerry Jennings' tenure, according to Sheehan. All of them were paid through what is known as "spin-up funding:" an accelerated payment of a long-standing Payment In Lieu Of Taxes (PILOT) agreement between the state and city. The payments are meant to make up for the behemoth Empire State Plaza in the center of Albany's downtown, which razed acres of taxable residential property in the 1960s.

The PILOT is set to continue well into the 2030s. The "spin-up" payments merely take money off the back end of the debt, and pay it forward now.

No one involved particularly likes the gimmick, since it robs the city of funding down the road. Sheehan acknowledges it as a necessarily evil, of sorts.

Others say the city might not have needed the spin-up payments, if it budgeted and allocated resources more responsibly.

"It's unfortunate that the governor has to tell the city, the mayor, the treasurer, and the majority of the common council: 'You need to have a responsible budget process,'" said councilman Frank Commisso, who chairs the city's finance committee.

"A handful of us on the council last year said, 'Gee, we have a lot of [employment] vacancies here. Let's not backfill these jobs,'" he recalled. "Let's slow the job postings and even consider a hiring freeze. And really, that all fell on deaf ears."

Sheehan maintains that Albany's problems are bigger than how many workers it hires, and for what wages. Systemic poverty and untaxable properties, she says, tie up swaths of potential city resources.

Even so, Sheehan believes Albany can eventually put together financially sound budgets — but it will need more help to get there.

"We need the Capital City to shine," she said Monday. "There's so much opportunity here.

"This is an investment that will allow us to grow our tax base."

The city's new fiscal year begins April 1, by which time Sheehan hopes the funding will be approved by the State Senate and Assembly — whose budget deadline is also the first of April.

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