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Long Island

Panel seeks new ways to finance local governments

With Nassau and Suffolk struggling to balance budgets, and residents burdened by crushing property taxes, the Long Island Regional Planning Council last week quietly accepted proposals for a new study on how to overhaul financing of local governments and schools.

“The cost of government and the resulting tax burden is a challenge to the economic prosperity of Long Island,” the council stated in soliciting bids. “By the year 2035 … property taxes will consumer over 14 percent of a household income, up from 8.3 percent in 2009. This is considered unsustainable.”

The council’s request for proposals called for a qualified consultant ”to identify and valuate various tax strategies other than the current property tax system” and “research and analyze the best practices utilized in other areas of the country.”

John Cameron, council chairman, said the council received proposals from “multiple credible consultants,” but declined to be more specific.

Richard Guardino, council executive director, said the organization expects to pick a consultant by year’s end and finish the study in eight months in time for 2018 budget deliberations.

“The status quo is not viable,” said Cameron. “We’re looking for another way to skin the cat, perhaps from the best management practices developed in other parts of the country.”

He conceded that some may worry that such a study may promise to replace existing property taxes, but instead end up adding a to the current tax load.

“Our goal is not to increase taxes on homeowners and business, but find a more equitable way of raising revenues for local governments … that will not drive young people and seniors off the island,” said Cameron.

Such studies are not new.

The planning council’s predecessor, the Long Island Regional Planning Board, did the staff work for the state-created Temporary Commission for Tax Relief on Long Island, which in 1993 produced an exhaustive two volumes of cost-cutting ideas. Just as the current proposal comes after the 2008 Wall Street meltdown, that study came after the bust of the early 1990s.

Among the report’s recommendations were merging the Nassau and Suffolk police academies, using retired police to cut overtime costs and changing the system of tax collection to reduce borrowing. It also proposed reducing the region’s 126 school districts to 66, to save $140 million a year, and creation of regional school districts to better equalize school funding between wealth and low-income districts.

A year later, a frustrated Lee Koppelman, then the region’s chief planner, acknowledged that even common sense ideas like fixing tax collections went nowhere.

“Everyone says they want tax relief,” he said. “But when someone makes a proposal, we get people who say ‘Let’s not change the status quo.’”

The tax relief commission also called for a personal income tax surcharge of 10 percent for those earning more than $50,000 a year to bring in $150 million a year. In making the recommendation, the commission cautioned that such a tax “must be designed and controlled so that income tax revenue would be a dollar for dollar off for the property tax.”

“It never got any traction,” said Paul Sabatino, then-Suffolk legislative counsel, because lawmakers feared being seen as anti-business.

But budget woes are so bad now in Nassau and Suffolk, that the option might not be dismissed, Sabatino said.

“An income tax surcharge may not be perfect — unless you compare it to the no man’s land of one shots that has put us in a $200 million structural deficit,” in Suffolk, he said.

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