1. NYS Mandates: What Westchester’s NYS Address Does to Local Taxes Kent Gardner, PhD Sarah Boyce, MSPH December 5, 2001

2. NYSNER CGR Profile “A nonprofit center for objective policy analysis and pragmatic change”  Research to drive informed decisions  Expertise to create effective solutions  Founded by George Eastman in 1915  Independent and nonpartisan  Offices in Rochester, Albany & White Plains

3. NYSNER Balance of Payments-- Westchester 1. Fiscal Balance Between Westchester & Remainder of NYS  Revenue from Individuals & Businesses in Westchester County to NYS  Expenditure by NYS in Westchester County 2. Impact of NYS Social Service Mandates on Westchester tax rate

4. NYSNER Westchester Net Contributor to NYS Fiscal Picture  Compared FY ‘96-’97 Expenditures to Calendar ‘96 Revenue  Westchester Businesses & Individuals Contribute $2.5 Billion in Revenue to NYS  Direct NYS Spending in Westchester County (grants plus direct state spending) of $1.1 Billion

5. NYSNER Net Contribution of $1.4 B to NYS  Westchester Residents: 5% of NYS Population  High Concentration of Income & Wealth  6% of NYS Sales Tax Revenue  9% of Real Estate Transfer Tax  10% of Personal Income Tax  11% of Estate Tax

6. NYSNER Net Contribution of $1.4 Billion—Why?  Lower Concentration of Need  3.3% of NYS Spending  Smaller Share of Grants: < 4% of Direct Payments to Local Governments  Smaller Share of State Operations 2.5% of State Payroll 2.3% of OTPS Spending

7. NYSNER Implications of Westchester’s Fiscal Contribution to NYS 1. Relative Prosperity of Westchester County Reflected in Large Share of NYS Revenue 2. Lower Need Reduces Share of Grants in Aid 3. High Business Costs Limit Westchester’s Attractiveness for State Operations  State Representatives Need to be Informed of Westchester’s Contribution

8. NYSNER NYS Mandates Drive Local Tax Rates

9. NYSNER B. Mandate Study: Methodology  Selected Comparison Counties  Gathered Info on Major Expenditures  Prepared Demographic Profiles  Developed Model Estimating NYS Cost for Comparison Counties, Based on Demographic Characteristics

10. NYSNER Comparison Counties

11. NYSNER Study Includes 1/5 of Westchester Budget

12. NYSNER Outside NYS, Social Services Funded Heavily at State Level  Cobb, GA; Lake, IL; Montgomery, MD; Bergen, NJ; Montgomery, PA pay NOTHING for Medicaid. Others pay only a fraction.  TANF, Safety Net, Pre-School Handicapped, Early Intervention Similar findings.  Mass Transit more variable.

13. NYSNER Social Service Costs Are a Large Share of Property Tax Levy in NYS

14. NYSNER Policy Implications  Mandates Contribute to High Local Taxes, Reduce Economic Competitiveness  NYS Legislature Shifts Burden of Raising Taxes to Counties  Partly Explains Generosity of NYS Social Services  Shifts Burden from More Progressive to Less Progressive Forms of Taxation

15. NYSNER Download the Study!  www.cgr.org  Click on “NYS Economic Data” button “What Westchester’s NYS Address Does to Local Taxes”