West Carthage mayor, local government leaders ask state for aid increase to municipalities

According to the office of the state Comptroller, which administers AIM, the money comes from the state income tax, but for years the state has been skimming from sales tax revenue collected by the counties to cover a portion as well.

Adjusting for inflation, the Comptroller said AIM funding has declined 24% since 2011, the same year that local governments had a tax cap implemented that restricts the amount they can raise property tax rates year over year.

On Wednesday, a group of mayors and town supervisors from across New York came to the Capitol to make the case that the state budget this year needs to include a 43% increase to the Aid and Incentives for Municipalities, or AIM, program for a total allotment of $1.02 billion.

In the budget proposal put out by the Governor this year, direct AIM funding is pegged at $666.6 million. NYCOM and state Association of Town Supervisor members are asking for at least a $1.03 billion funding package this year, a 43% increase they say would bring AIM funding back to the level it was set in 2009, adjusted for inflation.

AIM was established in 2006, and originally included funding for New York City as well as towns, villages and other cities. In 2011, New York City was cut out of the funding path, and the remaining recipients got about $720 million. In 2012, AIM was funded at $714.7 million and kept at that rate until 2020 when it was cut by 8% to $655.6 million. Most villages and towns were cut out of the program and instead given $59 million in “AIM-related payments” that were funded by money taken out of county sales tax collections, which are already distributed between towns, villages and counties in other ways. Towns and villages have not received income-tax based money since 2020.

That’s caused problems for local governments.

Albany Mayor Kathy M. Sheehan, president of NYCOM, said local governments are asked to fund many ground level services like EMS, fire, police, water, sewer, and occasionally power or internet as well.

Between the thousands of local governments, almost 453,000 people are employed, often in life-long careers with benefits, regular training and retirement plans including pensions. Costs go up yearly, both because of inflation and because of the ever-expanding role local governments are being asked to play, she said.

Sheehan said AIM was created out of an understanding that property tax and sales tax, the two main methods by which city, town and village governments are funded, are insufficient methods of funding local government operations, and some funding from the state’s income tax rolls was necessary to ensure that taxes were spread fairly among the state population.

While income tax is a progressive tax, meaning it costs lower income earners less money and higher income earners more money, sales and property taxes are generally a “regressive” tax, costing the same for high and low earners, but impacting lower earners more significantly.

But those are the only major funding paths that local governments have the power to increase, although those increases have been capped by state law.

Sheehan said as local governments have seen continual increases in the cost of doing business, and have been asked to take on additional responsibilities by the state, they’re facing down a serious question on whether to increase the taxes they have local control over.

“We don’t want to have to raise property taxes. We don’t want to have to rely more and more on sales tax. Those are regressive taxes that hurt low-income, working-class families the most,” she said. “Our progressive income tax in New York state was designed to help have everyone pay a fair share. But when we don’t get our piece of that fair share, we’re only left with regressive taxes, fines and fees.”

Sheehan lauded the state Senate and Assembly, which have both included increases in AIM allocation in their individual budget proposals, although at different amounts.

She said she was concerned, however, that because the two houses don’t have the same funding level in their budgets, and the Governor has called for no increase at all, AIM funding would be relegated to a “bargaining chip” that the leaders would use to negotiate other priorities.

“We need to keep that money there. We need for us to be at the table. We can’t be traded away for something else,” she said.

West Carthage Mayor Scott M. Burto said he has seen regular moves by the legislature to increase AIM funding, just for those increases to fall out before the final budget is complete.

“It’s extremely important, not just for our residents, but for the future of our education, the foundation that we provide all residents,” Burto said. “That’s why we need this commitment.”