Establishes temporary emergency financial aid to the city of White Plains

Summary of provisions

Section 1: The state finance law is amended by adding a new section 54-m which reads that state assistance shall be paid during the fiscal year ending on March 31st, 2001, and during the state fiscal year ending on March 31st, 2001, to the city of White Plains, in an amount equal to one sixteenth of one percent of the total sales and compensating use taxes collected within the territorial limits of the city. The Mayor, if he or she desires to make an application for state aid under this section, shall annually submit to the commissioner of taxation and finance the request of such city for such state aid and shall support such request with such information as the commissioner may prescribe.

Section 2: States the effective date.

Justification

According to the City of White Plains Budget Department, the bulk of the City's income is in the form of sales tax (32%), mort- gage tax and various user charges. These non-property tax revenues, in addition to State Aid, have served to stabilize the property tax load for residents.

During the past two years, White Plains has felt the impact of the economic turmoil that has enveloped the nation. The impact to the City has principally been in the form of less than anticipated revenue from sales tax.

In response, City management has restricted hiring, reduced the part- time workforce and cut expense line items relating to materials, supplies, equipment and purchased services. It has also looked toward developing additional sources of revenue. Amidst this tumult, the City of White Plains has continued to provide services to both its resident and non-resident population.

Since its inception in 1973, the City's sales tax has generated signif- icant revenues. The local sales tax rate was two percent until 1982 when Westchester County pre-empted one half of one percent of the tax, reduc- ing the City's rate to one and a half percent.

In 2008, the New York State Legislature already approved an additional 1/4% increment bringing the sales tax to 2 1/4%, and it is critical to the vitality of Westchester County and the downstate economy that the State due its part to further assist the City of White Plains during this fiscal crisis.

This should not be accomplished, however, by an additional increase in the sales tax levy, which is a regressive tax that will be passed on to local employers and consumers.

During these troubling economic times, we can ill-afford to increase the property tax levy or the sales tax levy in one of the state's most popu- lous and economically important cities. Instead, the state can help absorb the financial shortfall during these challenging economic times by adopting this legislation.

This bill transfers approximately 1/4% of the state's sales tax share directly to the City of White Plains, increasing the city's share to 2 1/2%, and placing it on par with other large cities in Southern West- chester County.

Given the challenging economic conditions and the unique character of White Plains, a provision to sunset this source of revenue would take effect, and the temporary financial aide package would expire at the end of fiscal year 2012.

Prior legislative history

New bill.

Fiscal implications

This bill would temporarily allocate one sixteenth of one percent of the compensating sales and use taxes collected within the territorial limits of the City of White Plains to the city, result- ing in approximately $4.3 million in revenue and an equal cost to the state.

Effective date

This act shall take effect April 1, 2010; provided, however, if this act shall have become a law after such date it shall take effect immediately and shall be deemed to have been in full force and effect on and after April 1, 2010; further provided, however, that the provisions of section 54-m of the state finance law, as added by section one of this act, shall expire and be deemed repealed at the close of the state fiscal year ending on March 31, 2012.