City, Town Merger Might Eliminate Property Taxes

2-19-10

A Word – ‘Preemption’ – May Be Worth Fortune

By JIM KEVLIN

Imagine a world with no property taxes.
That world could be the “new city” that would arise if the existing town and city of Oneonta could achieve consolidation, according to Barry P. Warren, the former director of SUNY Oneonta’s Center for Community & Economic Development.
Zero property taxes is a “rough estimate,” Warren acknowledged, but a perfectly realistic one. 
Seated beside him in a conference room at the Morris Conference Center was Tim Hayes, Warren’s successor at the center; he nodded his head in agreement.
Warren was author of the 1996 “Final Report on Intergovernmental Relations Between the City and Town of Oneonta,” the first effort to explore how the two municipalities could cooperate.
The “M word” – merger – was avoided, he said.
At the time, Warren said, it was estimated that a merged Greater Oneonta could capture at least $2 million a year that was going from the Southside commercial strip to state and county coffers.
The $2 million was likewise a “rough estimate” back then, because Otsego County was unwilling to say how much sales tax was actually being generated in the Town of Oneonta.
Today, 15 years later, the combined property-tax levies for the town and city are in the $4.5 million range.
Conceivably, with the addition of Lowe’s, Home Depot, Hannaford’s, Wal-Mart, Office Max and similar outlets in the Southside, there’s enough sales tax being generated to erase the property-tax levies, Warren said.
In New York State, towns like Oneonta can only obtain sales tax revenues through their counties.  Cities, however, can exercise the option of “preemption,” which allows local sales tax to go directly into city coffers.
Told of Warren’s conclusion, Oneonta Mayor Richard P. Miller, Jr., said he is not deterred by the Oneonta town board’s failure to support updating the 1996 study and intends to press ahead.
Miller had received the unanimous support of Common Council to pursue the update, which can be done without the town’s collaboration, although such collaboration would be helpful.
“Unless this is a win-win situation for city or town, why would anybody go forward with it?” the mayor asked.  “I am disappointed by what the town did, but I’m not surprised.”
He called it “an obstacle to be overcome.”
For his part, Warren pointed out that, since the sales-tax money would come out of Otsego County’s share, pre-emption would be a political hot potato.
The 1990s push was begun by the League of Women Voters, with Peg Harrington leading the way.  She and Gordon B. Roberts, the insurance executive and community leader, co-chaired the 27-member task force.
The task force included many people still active in the community today, from Huemac Garcia, now Catskill Hospice & Palliative Care director of development, to attorney Michael Getman, former president of the Fox Hospital board who ran for city judge in the last election.
Paul Adamo, Joe Bernier, Bob Harlem Jr., Hugh Henderson, Kay Stuligross and Bob Wood were among the other members.
At the time, the mayor was SUNY dean David W. Brenner, now retired, and Duncan Davie, now state Sen. Jim Seward’s chief of staff was town supervisor.  Both were supportive, Warren said.
But when the study was complete, he said, it was presented to each municipality and “didn’t go anywhere.”
“A lot of times,” said Warren, “you don’t have any real change until you have a crisis.”