A Special Report
from the New York State Assembly

Committee on
Local Governments

Robert K. Sweeney, Chair • Sheldon Silver, Speaker • Summer 2005
Assemblyman Robert K. Sweeney
Dear Friend,

This past year the Legislature had one of its most productive legislative sessions in recent memory. For the first time in over twenty years the State budget was passed on time. This budget has significant benefits for local governments and local taxpayers across the State. I was pleased to serve as the Assembly Co-Chair of the Budget Conference Subcommittee on General Government and Local Government Assistance where we agreed to a $55.9 million across-the-board increase in local government aid. The budget also caps the Medicaid burden on local taxpayers.

This newsletter highlights some of the significant legislation affecting local governments that passed the Assembly this year including the additional local government aid and Medicaid relief agreed to as part of the budget. I hope you will find it helpful.

Very truly yours,
Robert K. Sweeney, Chairman
Assembly Standing Committee on
Local Governments

NYS Seal

For additional information,
please contact:

Robert K. Sweeney
Chair, Assembly
Committee on
Local Governments

Room 837 LOB
Albany, New York 12248


2005-2006 Budget Summary

The enacted budget reduces the burden of Medicaid on local taxpayers by placing a cap on the local fiscal responsibility for Medicaid expenditures. It also accelerates the State takeover of the Family Health Plus Program. This will result in a savings for counties of more than $803 million next year and more than $3.4 billion a year by 2008.

As part of the enacted budget, all existing revenue sharing programs going to municipalities were consolidated into a single new program called Aid and Incentives for Municipalities (AIM). Additionally, the budget includes an additional $55.9 million in local government aid over the 2004-2005 state fiscal year.

This additional aid will be distributed as follows:

  • Cities will receive a 12.75 percent increase in local government aid.
  • Towns and villages will receive a 3.75 percent increase local government aid but no village or town would receive less than a $500 increase.

Additionally, $2.75 million was allocated for a new Shared Municipal Services Incentive (SMSI) Award Program. This program will be operated by the Department of State and will provide grants of up to $100,000 per municipality. Grants will be awarded to localities that share services or merge with other municipalities.

Private Activity Bond Allocation
A.3981 Sweeney; Chapter 79 of the Laws of 2005

The Federal Tax Reform Act of 1996 imposed a ceiling on the volume of private activity and certain other bonds that may be issued in a state in any given year. The Reform Act also established an allocation formula which provided 50 percent of the Statewide Industrial Development Bond (IDB) cap to State agencies and the remaining 50 percent to local governments. The Reform Act did, however, permit states to establish an alternative formula for allocation. This chapter continues the allocation system first implemented in 2000, providing one-third of the bond volume ceiling to local Industrial Development Agencies (IDAs) based on population; one-third to State agencies; and one-third to a statewide bond reserve for use by both State and local agencies. This legislation has passed both houses and has been signed into law by the Governor.

Industrial Development Agencies
A.8963 Rules (Sweeney); Chapter 159 of the Laws of 2005

Industrial Development Agencies (IDAs) have been created by the State Legislature to promote the economic welfare and prosperity of the State’s inhabitants and to actively promote, attract, encourage and develop economically sound commerce and industry for the purpose of preventing unemployment and economic deterioration. Several provisions of the IDA statute were set to expire in July of this year including: the authorization for IDAs to finance civic facility and continuing care retirement projects; certain tax policies and restrictions on the use of agency funds; and certain hearing notice requirements. This legislation extends these provisions for one year. This legislation has passed both houses and has been signed into law by the Governor.

A broader bill (A.8359 Sweeney) was also introduced that was intended to enact various reforms to make IDAs more accountable and effective. The one year extender provides the Legislature with additional time to explore and consider various reforms.

Demolition Financing
A.876 Tokasz; Chapter 78 of the Laws of 2005

This legislation will permit municipalities to issue debt to demolish privately owned buildings that pose a significant threat to public health or safety.

The demolition of unsafe buildings is generally an unexpected expense that cannot generally be planned for in a municipal budget. While municipalities are often able to recover the costs of demolition from the property owner, municipalities usually have to provide the initial outlay of funding for the demolition. Often the costs are never fully recovered. This legislation will provide municipalities with flexibility in addressing unsafe and dangerous buildings. This legislation has passed both houses and has been signed into law by the Governor.

Brownfield Site Clean-Up
A.3109-A Sweeney; Chapter 221 of the Laws of 2005 & A.8910 Rules (Sweeney); Chapter 219 of the Laws of 2005

Contaminated and abandoned properties exist throughout the state. Left alone, brownfields are environmental and financial burdens on a community. However, after cleanup, these sites can again become useful properties that add to the economic vitality of a community. This legislation authorizes localities to waive interest or penalties on real property taxes for brownfield properties subject to a brownfield site clean-up agreement. This will help to bring more contaminated properties into the clean-up program, while encouraging new investment and redevelopment. This legislation has passed both houses and has been signed into law by the Governor.

Renewable Energy
A.6571 Galef

The cost of a number of renewable energy technologies has fallen dramatically over the last decade, to the point that the retail price of electricity from wind and solar is nearly competitive with the retail price of electricity from polluting sources. Local governments, however, are required to choose the product with lowest price bid, which can hinder their ability to choose renewable energy. This legislation would allow municipalities to purchase renewable energy sources if the price is reasonably competitive, even if such price is not the lowest price bid. This legislation has passed the Assembly, but the Senate has not yet taken action.

Community Preservation Funds
A.6450-A DiNapoli

Undeveloped and agricultural lands in New York State are disappearing at a rapid rate. In the effort to conserve land, communities across New York State are exploring a range of options from land use planning activities to outright purchase of property. In conserving land, communities are pursuing different objectives such as providing parkland, safeguarding drinking water, conserving farmland, protecting habitat and preserving spectacular scenic views, but they all need resources to achieve their objectives. Previously, five towns at the east end of Long Island received authorization to establish Peconic Bay Community Preservation Funds, and this initiative has been highly successful in getting resources to those towns that are actively involved in land conservation. This bill would authorize other communities across the State to establish community preservation funds for land conservation which would be funded by a real estate transfer tax and would be subject to approval by a local referendum. This legislation has passed the Assembly, but the Senate has not yet taken action.

Municipal Audits
A.3112 Sweeney

Audit reports and management letters are important tools in the efficient management of local governments. They are utilized most effectively, however, when local officials promptly focus on audit findings and recommendations and, as appropriate, address any deficiencies in an effective manner. Written public responses also help foster greater accountability to the taxpayers of the local governments. This legislation would require municipalities to submit written responses to audit letters or reports within 90 days. This legislation has passed the Assembly, but the Senate has not yet taken action.

Accounting of Post Employment Healthcare Benefits
A.3108 Sweeney

Many local governments provide their retirees with post employment health care benefits. Though post employment health care benefits are provided after an employee retires, they constitute compensation for employee services. Under current practice, financial statements do not report the financial effects of post employment health care benefits until those benefits are paid. A new requirement by the Governmental Accounting Standards Board requires financial statements to include the cost of benefits in periods when the employees are actually working for their employer. This legislation is designed to allow municipalities and school districts to meet this requirement by allowing them to account for post employment benefits in the Employee Benefit Accrued Liability Reserve Fund. This legislation has passed the Assembly, but the Senate has not yet taken action.

Long Island Workforce Housing Incentive Program
A.2050 DiNapoli

More than one out of four households in the country, almost 24 million, are confronting housing cost burdens. This problem is particularly acute on Long Island, with more than 25 percent of households paying over 35 percent of their gross monthly income for their rent or mortgage. In many cases on Long Island, the ratio of gross rent to income was over 50 percent. The Nassau Suffolk Primary Metropolitan Statistical Area has been ranked the seventh least affordable area in the nation for middle-income housing. This legislation would establish the Long Island Workforce Housing Incentive Program. Local governments on Long Island that approve the construction of five or more residential housing units in one site plan would be obligated to require the developer to provide one of the following items: affordable housing, a fee to support the construction of affordable housing or land for the development of affordable housing. In exchange, the developer would become eligible to receive density bonuses and other incentives. This legislation has passed the Assembly, but the Senate has not yet taken action.

Wireless Service Provider Accountability
A.1493 Sweeney

Numerous counties have received authorization to levy local surcharges on wireless phone bills. The surcharges are collected by wireless service providers that determine eligibility for the surcharge based on the customer’s designated place of primary use. Wireless customers across the State have complained that wireless service providers have failed to remove surcharges when the customer’s place of primary use changes to a county that does not levy a surcharge. This legislation seeks to remedy the problem by requiring wireless service providers to update customers’ records within 45 days of notification that a customer’s billing address has changed. In instances where the customer’s place of primary use changes to a county without a surcharge, wireless service providers that continue to levy the surcharge after receiving notification would be responsible for refunding any surcharges. The legislation has passed the Assembly, but the Senate has not yet taken action.

Surcharge Collection Accountability
A.3111 Sweeney

In 2002, the Legislature shifted oversight of the Statewide wireless surcharge from the Division of the State Police to the Department of Taxation and Finance. This change was made in order to provide greater accountability in surcharge collections. A recent report from the Office of the State Comptroller found that the lack of explicit authorization for the Department of Taxation and Finance to audit wireless service providers left the Department unable to verify surcharge collections. This legislation would require the Commissioner of Taxation and Finance to enforce the payment and collection of the State wireless communications service surcharge and authorizes the Commissioner to audit and examine the books and records of wireless communications service suppliers. The legislation has passed the Assembly, but the Senate has not yet taken action.

Land Use Planning
A.8409 Sweeney

Currently, the General Municipal Law requires municipalities to refer certain proposed land use actions to county planning agencies for review. Many municipalities are uncertain whether to refer certain land use legislation to county planning agencies if the legislation is not enacted under the zoning enabling authority, but under the general police power of the municipality. This legislation would clarify that enactment and amendment of land use laws and ordinances are subject to the referral requirement. This would reduce the risk that a local enactment could be invalidated, and would ensure such local legislation receives appropriate attention for its county-wide and intercommunity impacts. This legislation has passed the Assembly, but the Senate has not yet taken action.

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