Unfunded Mandates
Unfunded Mandates
Who Should Pay the Budget Bill? State versus Local Taxpayers.

Local home rule versus State authority.

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27 States regulate unfunded mandates, 11 through statute, 12 through the constitution, and 4 through both.  New York State does not clearly and unequivocally regulate unfunded mandates through the constittuion or statute.

 

However, one interpretation is that Article IX, Section 2, Sub-section b, of the New York State Constitution limits the authority of state government to impact the "property, affairs or government of any local government" with the exception of home rule messages (requests from localities for special legislation).  This provision, arguably constitutional, limits the ability of the state legislature to enact legislation that directly impacts local governments, especially in the case of enacting policies and programs that localities will bear the responsibility of financing.  Does, in fact, the State Constitution allow for the promulgation of unfunded state mandates onto localities?

 

In 2010, nine unfunded state mandates consumed $4 billion, or 90 percent, of all county property tax receipts.  According to the Tax Foundation, New York State has the sixth worst property tax burden in the nation and contains the 16 highest counties when property taxes were measured as a percentage of home value. These killer property taxes can be attributed to the costly, budget-busting unfunded mandates handed down from the state to municipalities and school districts. Enacting a moratorium on unfunded mandates will provide vital relief to families and businesses.

Whenever Albany tells local governments to do something – start a program, provide a service, meet a perceived need – and doesn’t provide any funding, that constitutes an “unfunded mandate.”

The increased costs caused by unfunded mandates are absorbed by local governments and school districts and lead to increased local property taxes for homeowners. The State Legislature needs to enact a permanent moratorium on certain unfunded state mandates imposed on local governments and school districts. In addition, the legislature should require fiscal notes on bills stating the estimated annual costs to affected communities, along with creating an “Unfunded Mandate Reform Plan” to identify unfunded mandates that need to be repealed.

Taking a comprehensive approach to banning unfunded mandates would help stop Albany’s continued cost shift where the buck is continually passed onto the backs of local governments, school districts and taxpayers.

NEWS BEHIND THE CONSTITUTION
lohud.com
Joseph Spector
Saturday, May 5, 2012
 ALBANY — The state’s fiscal woes may have been largely remedied, but the problems have been pushed down to local governments. And perhaps nowhere is it more pronounced than in upstate cities. 
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The Wall Street Journal
Jacob Gershman
Friday, April 13, 2012
 As fiscal fears in New York spread from Long Island to the Rust Belt, Gov. Andrew Cuomo is confronting the question of how to help municipal governments pull through the worst cash crunch in decades. 
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Rochester Democrat and Chronicle
Cara Matthews
Monday, January 2, 2012
"A panel charged with reducing unfunded state mandates on local governments is recommending steps to save $245 million, but its final report does not tackle some of what are considered New York's most onerous and costly mandates. The report...
"The report proposes a constitutional amendment to ban mandates that don't have funding attached. A statutory ban could be enacted while the constitutional amendment was being ratified."
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The Empire
Colby Hamilton
Friday, September 30, 2011
 Medicaid costs New York a lot of money. The state spends more than $53 billion a year to care for 4.7 million low-income people. That represents about 40 percent of the state’s entire budget. 
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Crain's New York
Greg David
Sunday, June 26, 2011
 What is Gov. Andrew Cuomo going to do for an encore? It's actually a serious question. And his second act is likely to be just as hard, or harder, than the first one.  
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OPINION EDITORIALS ON THE CONSTITUTION
New York Post
Chris Collins
Monday, May 9, 2011
"The state's mandates on local governments are far too numerous to detail here. Let's start with the mother of all mandates -- Medicaid.  Nearly every dime Erie County collects in non-school-tax property taxes goes directly to the state...
In this 2011 opinion piece for the New York Post, former Erie County Executive Chris Collins advocates for Albany to rein in unfunded mandates such as Medicaid that are absorbing a majority of Counties' property tax levies, in addition to addressing runaway public sector pension costs and expenses imposed on local school districts via the state's Taylor Law. 
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New York Post
Steve Levy
Wednesday, March 2, 2011
"Local governments are crushed under the weight of state mandates and regulations. While I have frozen Suffolk County general-fund taxes for seven straight years, it has become increasingly challenging to control other costs so that we can absorb...
This 2011 New York Post opinion piece from former Suffolk County Executive Steve Levy underscores the urgent need for Albany to take proactive steps in addressing the crushing financial burden that unfunded mandates impose on local governments and urges future boldness from, the State Mandate Relief Redesign Team when tackling the issue of unfunded state mandates.
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SOLUTIONS
A selection of relevant solutions from other states.

As noted in Governor Andrew Cuomo's "2011 Mandate Relief Redesign Team Preliminary Report," (citing the work of the Citizens Research Council of Michigan, 'Reforming the Process for Identifying and Funding Section 29 Mandates on Local Governments”) at present, 27 states have some form of a constitutional or statutory restraint on the issuance of unfunded mandates on local governments.

Source: Cuomo Administration, "2011 Mandate Relief Redesign Team Preliminary Report," http://www.governor.ny.gov/assets/documents/finalmandate.pdf.

Source: Citizens Research Council of Michigan, “Reforming the Process for Identifying and Funding, Section 29 Mandates on Local Governments,” Report 355 (July 2009), at 15, http://council.legislature.mi.gov/files/lcsm/rpt355.pdf.

 

 

 

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