The Aid and Incentives to Municipalities, or AIM, funding, will not be eliminated from the state budget, Gov. Andrew Cuomo announced on Feb. 15, as nearly $60 million in revenues for towns and villages would be covered through a proposal to collect more sales tax from internet marketplaces.
The original plan to cut the funding would have shrunk funding for municipalities for which state money accounts for less than 2 percent of its budget. Last year, Rockville Centre received $400,000 through the program — about 0.5 percent of its 2017 expenditures — but under Cuomo’s proposed budget, the village would have received nothing.
“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.”
Rockville Centre Mayor Francis X. Murray told the Herald last month that the cuts would most likely mean a tax increase of about 2 percent for village residents, but added that he had spoken with State Sen. Todd Kaminsky about restoring the aid for villages, and that he was trying to set up a meeting with Cuomo and the New York State Conference of Mayors, or NYCOM, of which Murray is on the executive committee. About 540 mayors from across New York gathered in Albany earlier this month to demand Cuomo restore AIM funding.
But the proposed budget’s terms are not what the towns and villages expected. The proposal “repackages” the money, representatives of the New York Association of Towns and NYCOM said on Feb. 18. According to Gerry Geist, the NYAOT’s executive director, AIM funding should be provided 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 added that New York’s local businesses are at a disadvantage due to online retail competitors not collecting sales tax and that this motion should simplify sales tax enforcement and ease collection burdens for the retailers who sell through these platforms. In a statement, Cuomo noted that on an annual basis, the elimination of the internet tax advantage is expected to generate $390 million in additional revenue for local governments.
But Peter Baynes, NYCOM’s executive director, 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,” he added.
Kaminsky and Assemblywoman Judy Griffin, a Democrat from Rockville Centre, said they are working on a solution. “Ensuring that Long Island localities receive adequate state funding will enable them to provide a high level of services without raising taxes on our hardworking constituents,” Kaminsky wrote to the Herald in an email. “Long Island Senators will be working diligently over the next month to develop a budget that contains such funding.”
Griffin added that when calling on the AIM funding to be secured, she had not advocated to divert it from another source. “I look forward to working with my colleagues in the Legislature, and with the Governor, to find a more pragmatic and viable solution to this complex issue,” she said in a statement.
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 the state and, according to Hempstead Town Supervisor Laura Gillen, was 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.
“Hempstead Town would have taken the biggest hit out of any other municipality in the state,” Gillen said. “Therefore, restoration of this funding has been my top priority.”
To ensure resources are received faster, the state will 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.
Ben Strack and Melissa Koenig contributed to this story.
