Governor Andrew Cuomo announced on Feb. 15 that the Aid and Incentives to Municipalities, AIM, Funding, would not be eliminated from the state budget. Approximately $60 million in revenues for towns and villages would be covered through a proposal to collect more sales tax from Internet marketplaces to keep AIM.
“The original proposal only impacted localities receiving a relatively small amount of money, but I have been contacted by mayors and local officials who say in these tough times it would still be a challenge for them,” Cuomo said. “That is why we are revising the executive budget to use Internet sales tax revenue to make these impacted localities whole.”
But the proposed budget’s terms is not what the towns and villages expected. The proposal just “repackages” the money, representatives of the New York Association of Towns, AOT, and the New York Conference of Mayors, NYCOM, said on Feb. 18. According to The AOT executive director Gerry Geist, AIM funding should be funded through an independent stream and not linked to the Internet sales tax revenue.
Cuomo said the elimination of the Internet tax advantage will even the playing field between brick and mortar retailers and out-of-state merchants. He also added that New York’s local businesses are at a disadvantage due to online retail competitors not collecting sales tax and through this motion he said should simplify sales tax enforcement and ease collection burdens for the retailers who sell through these platforms. In a statement, Cuomo said that on an annual basis, the elimination of the Internet tax advantage is expected to generate $390 million in additional revenue for local governments.
However, the AIM Funding distribution will fall on the counties due to the increase in sales tax via Internet sales. But NYCOM executive director, Peter Baynes said, “the restoration of the $60 million is robbing one taxpayer to another.”
“Rather than playing this shell game, New York State should be fulfilling its obligation to increase its investment in municipal aid and the property tax relief it will generate,” Baynes said. “Imposing a new mandate on counties to make up for the state’s cut to villages and towns will only further harm New York’s already overburdened property taxpayers.”
Geist also shared a similar distaste for the “restoration” and added that counties would be required to make up for a town’s lost AIM money with sales tax revenue.
“This proposal does nothing to reduce property taxes, and takes money out of one hand to pay the other,” Geist said.
In Nassau County, Kennedy said, the villages haven’t been getting a “fair share” of sales tax revenues, thus, for him, it didn’t matter how AIM monies were distributed, as long as the monies came to the village. Despite how AIM funding will be dispersed to the villages, Kennedy said he would continue to pursue litigation with the Town of Hempstead and Nassau County to secure a fair share of sales tax revenues for the village.
Nassau County will distribute the AIM Funding to the Town of Hempstead and all incorporated villages.
The Town of Hempstead faced $3.8 million worth of cuts to state aid, the most out of any other township or village in New York State and according to Hempstead Supervisor, Laura Gillen, preparing for the worst.
Last month she asked the Town’s departments to identify areas of spending to be considered for cuts. Relieved to have the AIM funding restored, she thanked Cuomo.
“I want to thank Governor Cuomo for working with the Town and restoring $3.8 million dollars’ worth of vital funding for essential services that our residents rely on,” said Hempstead Town Supervisor Laura Gillen. “Hempstead Town would have taken the biggest hit out of any other municipality in the state; therefore, restoration of this funding has been my top priority.”
To ensure resources are received faster, the State will also implement the Internet sales tax requirements earlier, starting June 1 of this year as opposed to Sept. 1, the date originally proposed in the Executive Budget.
Kennedy, also the first vice president of NYCOM, spent three days in Albany opposing the elimination of AIM funding. Approximately, 540 mayors from across New York joined him to demand Cuomo restore AIM funding.
“I’m happy for the village of Freeport,” Kennedy said. “but I understand of the loss Internet sales tax that would have been redistributed to other villages through New York State because the county is assuming [the] responsibility of AIM funding.”
By Friday afternoon, a jubilant Kennedy said the overturn would allow Freeport to receive close to $1 million dollars and prevent the need to increase taxes or cut services. According to Kennedy, the deficit would have caused a 3 percent increase in village taxes in the next budget year. AIM funding has been monies that have traditionally been spent in the village’s street repairs and cleaning, and salaries in the fire and police departments.
Senator John Brooks, Democrat from Seaford, was also pleased to see AIM restored. “I am glad to see AIM funding for Towns and Villages being restored by the Governor in his amended budget proposal,” Brooks said. “These communities rely on state aid and support, and I made that point clear when I saw the proposed cuts.”