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Kaplowitz to Yorktown: You Have to Make Changes

YORKTOWN, N.Y. -- Westchester County Legislator Mike Kaplowitz is asking the Town of Yorktown to take a look at making fundamental changes to budget items such as pensions and healthcare in order to to stay within the limits of the newly- adopted tax cap.

According to Kaplowitz, over the past 13 years, the average tax increase for Yorktown homeowner has been 2.88 percent, which not only exceeds the tax cap of 2 percent or the rate of inflation, but it is also higher than the county average of 1.66 percent increase. He suggested that the town must make fundamental changes to pension and healthcare in order to balance the town budget.

“[We] can’t simply put band-aids on heart attacks, it’s not going to work,” he said. “If we don’t get a handle on pension, and health insurance, those fundamental things nationally and at the state level … there’s just not enough pencils and papers and gavels that are going to save you enough money to bring you under the cap.”

Supervisor Susan Siegel mentioned again at this week's meeting that based on the contractual step increases the town must make, as well as their proposed healthcare payments, the town is already exceeding the 2 percent cap . Kaplowitz said that the healthcare increases that are in the double digits, which the town is proposing, are going to “break the bank.”

Kaplowitz also provided what he described as good and bad news in regards to taxes, but stressed that the town can't rely on these tax revenues instead of making changes. The county reportedly ended up with a $66 million surplus in 2010, which was increasingly higher than their surplus in 2009, with $36 million. Kaplowitz said this surplus showed that hard choices like layoffs do in fact work.

“The surplus is moving in the right direction, and it shows that painful moves of laying off or having retirement of as much as 10 percent of the personnel works,” Kaplowitz said. “And that’s unfortunately going to have to be the story that every municipality’s going to have to consider, hopefully through voluntary, hopefully through attrition, and hopefully through consolidation and efficiency because you’re just not going to make it up in other revenues.”

The bad news, Kaplowitz said, was the mortgage surplus. The mortgage tax collected by the county and paid to Yorktown was over $1 million in 2010, and as of this March that number is down to $968,000, and the real estate revenue does not appear to be increasing soon, said Kaplowitz.

Kaplowitz said the sales tax numbers were “a little better” – and that Westchester has the lowest sales tax in the entire state at 3 percent.

Sales tax is at $222.9 million surplus, whereas the year before it was at $219.8 million.

“[It’s] better, but not the cavalry that’s going to come to the rescue either,” Kaplowitz said. “And we know that, cause you talk to your friends and neighbors -- people are spending, spending a little bit more but not 5 and 10 and 15 and 20 percent more. It’s just, its not that “V” recovery that we’re hoping for—it’s a straight line, so sales tax is not going to be the relief.”

Kaplowitz said the board has to make fundamental changes to get tax relief since they aren’t going to find it in those tax revenues.

“So where do you go?” Kaplowitz said. He suggested the board reexamine the idea of fundamentally revamping the way they provide pensions to public employees in what he described as a defined contribution world versus defined benefit world.

“It’s nice to have cradle to grave pensions but IBM got rid of them years ago—it’s nice to have a defined benefit plan at the end but the taxpayers pay for it and we have to weigh in this actuarial world where people work and live much longer, can we afford it as a society, or what’s the cost of having it?” he said.

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