I was at City Hall this morning for the unveiling of Elmira’s 2018 Budget, a proposal that includes a 17% increase in property taxes in order to address a $2,500,000 budget shortfall.
The fact that Elmira’s fiscal health is in dire condition should not surprise anyone who lives or works here, and the reasons that led to it are complex and multifaceted. However, Chemung County’s 2013 decision to redirect sales tax revenue from the City of Elmira and the other local municipalities and into its own coffers needs to be part of the discussion of how we got here and what we are going to do to remedy the situation. Creating a scenario where our City government is forced to increase taxes by 17% while the County government simultaneously boasts of its 13th year without a tax increase is no way to do business if we have any hope of recreating a strong, vibrant community that we are proud to call home.
It is interesting to note that from 2008 to 2013 Elmira’s average yearly property tax increase was 1.86%, and its economic picture improved drastically. Yet, in his overview of the 2013 Budget, Elmira City Manager John Burin warned of difficulties to come, stating that Elmira “has gone from near bankruptcy to a healthy and stable fiscal position. The City has enjoyed several upgrades to their bond rating and also established a fiscally prudent fund balance. However, the state tax cap legislation, static aid to municipalities, excessive employer pension contributions as well as legislation restricting a city’s ability to receive revenue for services rendered on a variety of not for profit organizations will overtime deplete reserves and bankrupt cities.”
Disregarding Burin’s warning, the Chemung County Legislature passed a financial restructuring plan in late 2013 that made Elmira’s obstacles much, much worse, contributing greatly to today’s announcement. Prior to enactment of the restructuring plan, Chemung County received 50% of all sales tax revenue collected throughout the county, and the municipalities received the other half. The restructuring plan changed that ratio drastically, resulting in a sales tax split for 2017 of more than 70% to the County and close to 10% to the City. For Elmira, the new ratio has resulted in revenue losses of roughly $2,500,000 since 2014 – a number that mirrors its entire budget shortfall.
This issue is not isolated to the City of Elmira. Facing economic stress, both the Village and Town of Horseheads levied taxes in 2017 for the first time in more than 30 years, the Village of Van Etten voted last week to dissolve, and most other local municipalities face critical decisions of how to continue to cope with dwindling resources.
Elmira is the center of this community, the County seat, and its future will determine the direction of our County for generations to come. Allowing Elmira to fail, or simply shaking off these issues as something the City needs to deal with on its own, is not an option. Previously a group called the “Council of Governments”, consisting of local elected officials from all levels of government across Chemung County, existed to deal with major issues like this. What happened to that group? Maybe it’s time to resurrect it so that all stakeholders have equal standing to voice their concerns and offer collective solutions. Could there be a better time to do this?