May 31, 2006

GOP Urges Tax Relief Opt In

Yesterday North Fork Legislator Ed Romaine called for a special session of the legislature to allow him to introduce a measure designed to provide gasoline tax relief.

Earlier this month, state lawmakers agreed to freeze the state sales tax on gasoline at the $2 per gallon rate. The legislation allows counties to opt in and similarly freeze the amount of sales tax they collect. But there's a caveat.

In order to participate in the tax cap, which goes into effect on July 1, the county would have to pass its own measure by June 16. Members meet on June 13, but pursuant to the rules of the legislature a bill has to be in its final form seven days prior to any vote. That means lawmakers would have to hold a special meeting to consider the opt-in bill.

According to legislative rules, there are three ways to call a special session. The county executive can make the request, the Presiding Officer can call for the meeting, or 10 members of the legislature can do it.

On Friday, Romaine was not optimistic he'd get the 10 votes needed to call the special meeting. During debate of an earlier measure, Democratic majority members seemed disinclined to consider offering sales tax relief. The prevailing sentiment was that the county's fiscal situation is too tenuous to risk losing gasoline sales tax revenue. County Executive Steve Levy has said he needs to see how the loss of revenue would be offset before he could support the motion.

On Friday, a statement from County Executive Steve Levy's press office read as follows, "We're supportive of lowering the tax and look forward to working with legislators to find appropriate offsets. Last year we put in the offsets for the fuel tax cuts, and that's the way it has to be in this instance as well. But some grandstanding legislators want to increase the county workforce by 10% and simultaneously look to cut revenues without commensurate offsets. This would lead to an automatic property tax increase."

Not so, according to Romaine. He pointed out that recently the county comptroller reported a record budget surplus of $158 million. That's $13 million more than was anticipated. Since the anticipated revenue shortfall the proposed gas tax cap might incur is $11 million, "There is our offset," Romaine said, adding, "Certainly the county executive planned to return that extra money to the taxpayers and I can't think of a better way to return the money than at the gas pump."

The comment about increasing the workforce relates to another Romaine initiative. Touted as a measure that enhances transparency in the budget process, the lawmaker has called into question a budgeting method that's been around for years. Positions are listed in the budget document but never actually filled. At the end of the year, the salaries for non-existent employees are placed into the budget's fund balance and used to forestall tax increases. The strategy has been used for years in county budgeting, dating back to before the current administration.

Last year, during the budget development cycle, several lawmakers rebuked the method as disingenuous, but not enough of them opposed the idea to pass Romaine's bill. It called for either filling or eliminating the positions in order to depict the truest picture of county financial needs. Otherwise you're presenting a dishonest budget, he said.

Offering opposition to the measure, the CE was quoted calling it the most irresponsible bill he'd ever seen. Hiring all the people listed in the budget would be a budget buster, his reps said.

"I never advocated for increasing the workforce," Romaine said this week. "I said either fill positions or eliminate them. This administration is very selective with their facts. They deliberately mislead the general public." According to the lawmaker, at any given time there are between 1200 and 1000 unfilled positions listed in the budget, representing somewhere approaching $40 million.

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