Aid and Incentives for Municipalities 2016-2017

Capital Region cities are marked in blue. The hypothetical totals for Albany (explained below) are right under Albany's actual total. (The ranks for those hypothetical numbers are where Albany would rank if it was getting that level of aid.)

The table is sorted by total population so you can compare cities of roughly the same sizes.

Does Albany get a fair share of state aid?

city of Albany view from corning tower

Fair might depend on your perspective.

Albany mayor Kathy Sheehan released her proposed city budget for the next year on Monday. Among the many points that will surely end up being discussed is that her administration is again seeking $12.5 million from the state in what it's calling "Capital City Funding."

Whether the city of Albany gets a fair deal from the state is a contentious topic. On one hand, the city is the capital and gets all the benefits of that -- jobs, attention, associated economic activity. It also has to bear the costs and complications associated with all that activity. And much of its land is untaxable (63 percent according to the Sheehan admin) because it's owned by the state (more than half the value of that untaxable land). City leaders have long argued the state's funding for the city comes up short when everything is taken into account.

One of the main arguments the city has made is that it gets much less state aid than other big upstate cities -- and it's not even close. How big is the gap? And what would the gap look like if Albany got that $12.5 million? Or what it if got aid that was about the same as those other big cities?

Let's take a quick look at the numbers.

This whole situation might sound like an express train to Snoresville...

But the city's budget has been continually crunched in recent years -- "fiscally stressed" as the state comptroller's office describes it. And those budget issues -- along with how they relate to taxes and services -- run through the background of many different things that people often find more interesting: like what sorts of buildings get developed, or how much people pay in taxes on a house.

The numbers

They're above in a large-format table -- click or scroll all the way up.

But you'll also probably want to read the details below.

A few important details about the numbers

This sounds familiar
Yep, we did something similar almost two years ago. The result was largely the same because the aid numbers haven't changed.

The money
In this case, "the money" is the state's "Aid and Incentives for Municipalities" -- or, as pretty much everyone refers to it, AIM. It's not the only the way the state extends financial aid to cities, but it's a main way. Here are the totals for cities, towns, and villages around the state from the 2016-2017 state budget.

We're just going to look at AIM for cities, though.

The population
We're using population figures from the Census Bureau that are estimates from 2014. Yep, they're kind of old. But most cities upstate don't have populations that are shifting that quickly. (There are 2015 estimates available, but only for cities with populations above 65,000.)

More important bits regarding the poverty numbers: The Census Bureau estimates are based on a portion of the population for which poverty status could be determined during the previous 12 months. That population is often smaller than the total population of the municipality. Example: Estimates have Albany pegged at about 98,000 residents, but the poverty estimate is based on a population of about 88,000 people. So the number of people in poverty might be a bit of an underestimation. Similarly, the percent of the population in poverty is also based off this number for which poverty status could be determined.

albany city hall

The bottom line

+ Just looking at AIM alone, Albany gets the short end of this particular stick. It's per capita rate ranks #41 among cities, and it's waaaay behind the other large cities upstate. Like, it's not even close.

+ If Albany got AIM at roughly the same per capita rate as Buffalo, Rochester, Yonkers, and Syracuse... well, the city's budget situation would look a heck a lot of better. It'd provide roughly $38 million more a year to the city. That scenario also sounds like something from a fantasy.

+ OK, but what if Albany just got AIM at the average per capita rate for cities? Then the city's looking at about $4.5 million more. That's not nothing. But it would still be set apart from the other four big upstate cities.

+ And with the $12.5 million in "Capital City Funding" (which wouldn't be AIM, but let's just go with it)? That would rank Albany #9 among cities for AIM per capita.

So what's fair?
That's a hard question, and one for which different people are going to have different answers. Sure, Albany gets the short end of AIM. But it also gets about $15 million a year in payments in lieu to property taxes for the Empire State Plaza. But it also doesn't get anything for the Harriman campus. And the state is helping to build a convention center. But the state has also said it would sell two large, theoretically attractive parcels of land in the city for new development -- it justhasn't been able to make a sale.

It will again be interesting to see how the city's leadership makes its case with the state over where this balance should be struck.

Schenectady, Troy, Saratoga Springs

+ Schenectady ranks #17 in per capita AIM. And it's getting the casino. But the city's school district has long argued that it gets the short end of state education aid payments. And in announcing his new proposed budget, mayor Gary McCarthy argued that point again recently. (School taxes are often just as much, if not more, than city property taxes.)

+ Troy ranks #9 in AIM per capita. In fact, it gets almost as much as Albany, even though it has about half the population.

+ Saratoga Springs ranks last among upstate cities in AIM per capita. It also has one of the lowest poverty rates of an upstate city.

Comments

Where the heck does "the state" get all this money?

Let's not forget NYS doesn't pay anything for the land that 787 takes up either, which is also theoretically valuable land, and would make those other two parcels more attractive as well.

The city of Albany gets a great deal of benefits from being the state's capital, as noted jobs, attention, associated economic activity, etc. The associated costs are not solely borne by the city for all that activity, and even if it were, a well run administration would end up being in the black as a result. And the claim about untaxable land is a smokescreen. What is going on with the 47% that is taxable? Too many decisions in Albany are made for political reasons rather than sound municipal management consideration. Change that and the city should do just fine with what they have.

There's no question that Albany gets shortchanged both with city aid and school aid.

A comparison can also be made to the other 49 state capitals.Most get some kind of Capital City Grant much as Sheehan is now, three years into her term and many years after others proposed this idea, advocating.

It is also incredibly important to balance the benefits of having the State Capital here, which mostly accrue to the entire region, as opposed to the costs, which mostly fall on the city of Albany.

Imagine Clifton Park or Guilderland if this were not the state capital. You'd have some mighty nice farmland there, not much else. Yet those localities pay nothing towards the cost of having a state capital here. It all falls on Albany.

Albany too would be even more depressed if it didn't host the state capital, but it would not have the huge load of carrying such a percentage of its land untaxable.

How is amount of state aid determined? Is it just a historical number? Is there a formula? I'm not understanding why Albany would be so low compared to other upstate cities given the population and level of poverty. Is the 15M payment for ESP much more than what the city would get if the land was taxable?

"Too many decisions in Albany are made for political reasons rather than sound municipal management consideration. Change that and the city should do just fine with what they have."

Ace, the first part of what you said is completely accurate. In fact pretty much ALL decisions made at the city and county are political and cannot be understood in any other way. Sound management never enters into any equation.

Having said that, even a highly competent city administration (i.e., not the Sheehan or Jennings' type) would still be very challenged to come up with real solutions without a much higher level of external support. The State should pay more for it's buildings; the huge not-for-profits in Albany should pay for the services they consume; finally, the 70,000 daily commuters who create their wealth in Albany need to pay a fair share to operate the city.

I completely agree with your implied statement that the city and county are corrupt and incompetent. Incumbents absolutely need to go find new jobs.

"How is amount of state aid determined?"

Three steps:
a) Pol
b) i
c) tics

Ask your local electeds why state aid isn't higher. We've had decades of ineffective representation at the local and state level. We are looking at You, Sheehan, McCoy, Breslin, Fahy, MacDonald......and before you Jennings, Corning, O'Connell, blah blah blah

Stan - "fair share" is quite difficult to define.
For example, police department is the largest expense of the city - about 1/3 of the budget.
It maybe somewhat justified, given high crime rate in the city - 10x of Colonie or Guilderland.
On the other hand, police expense in Albany, both in absolute and relative terms is larger than in Buffalo, Rochester or Syracuse - which are not safest cities as well. If you think about it, APD cost per capita is coming close to NYPD..

How much of that cost should be paid by commuters? Of course, we know that SUNY professors do a lot of robbery between classes (ask Bharara!), and state employers are mostly gang members - but that is why SUNY police and state troopers are tasked with campus and plaza patrols.
There is also quite limited benefit from things like trash service.
At the end of the day, city is doing only that much for non-residents.

Look at the details of Sheehan's budget and take note of the salaries being paid to a few people. How much is 100% political operative and former chief of staff Matt Peter making now?

How much is budgeted for the useless treasurer's office of Darius Shahinfar, who cannot even send out tax bills correctly (his basic function in life) and must contract out his own office's work?

Here's a clue, Major Sheehan: either award the contract, or fund staff in the treasurer's office. You can't justify both.

How much is budgeted for the useless City Auditor's office? Anyone seen a useful audit from there lately? Real savings opportunity there, Sheehan.

How much is the city working with the (useless and corrupt) county on the vacant buildings crisis? Any evidence of even a single meeting or any teamwork at all?

How much is devoted to code enforcement, which has been a joke for decades? Code enforcement, done properly, could really bring some visible change to Albany.

Having lived in both Albany and the suburbs and being mildly aware of the budgeting in both places, I have to agree with Stan over ace on this one.Yes, being the state capital means the area isn't depressed the way other Upstate cities are, but it is difficult for me to point to any benefit the city itself gets over the region. Much of the money associated with being the Capital is spread out over the region, not concentrated in the City of Albany.

Albany obviously benefits from being the capital city, and the state government workers in downtown Albany patronize restaurants and other businesses there, and visiting workers and officials patronize the hotels downtown. However, the Harriman Campus is a different story.The campus is set up so car oriented with no businesses around it that I would imagine the city sees very little financial gain since most workers live in the suburbs. I'm sure many of the Harriman Campus workers stop by Stuyvesant Plaza or Crossgates on their way home from work, but both of those very lucrative properties are in Guilderland.

Mike, commuters don't have jobs if the city doesn't host the State.

The State displaces other (taxable) businesses that could locate where the state buildings are. I don't mean to take that argument too far - obviously the Albany metro region would look an awful lot like Utica if we were not the state capital - but the infrastructure must be supported somehow.

Second, those state and not-for-profit entities consume services. Water, sewer, roads, safety, fire, etc.are all provided, not by the region, but by the city.

Third, some of the not-for-profits are quite wealthy. How much does the CEO of Albany Med get paid? care to guess?

It is time that this region recognized that the city of Albany is the economic engine of the region and needs to be supported.

Mike, I meant to add that I completely agree with you on some city costs being out of line and unjustifiable. The police and fire budgets are both much too high. I listed some other obvious issues in my post above. Believe me, I know how inefficient the Sheehan administration has been.

Having acknowledged that, however, it still remains a fact that Albany city cannot be accused of having a spending problem overall. Per capita expenditures are similar to other cities. Per capita revenue base is the problem. And the city leadership does not have the balls to attack this problem forthrightly.

Stan, sure math needs to be done here.And we're talkig facts here..
Water (and effectively sewer) are charged by usage, and department is close to break even last time I looked at the numbers. I would be surprised if state gets water for free anyway.
Fire.. I am not so sure how that works. Given a handful of high-rise buildings, and required fire equipment - city can well bill the state for services which wouldn't be needed otherwise.
Roads - actually a small part of city budget, and many larger roads are state maintained. Not sure how that works with snow, though.
Safety - as in medical - I thought those things are billed to insurance.
I do see the point in commuter tax and billing state for services, problem is that the magnitude of that. If you want to resolve all problems and charge $1000 a year - that may not be fair. And $100 a year may be fair, but not put a dent on city issues. For reference, city budget is about $1800 per capita.

Would there be any other business if state offices was not there? Complicated question - doesn't look like there are lots of takers for the land.. Would there be enough employers - or business would be better off elsewhere?

As for recognizing.. My feeling is that today Albany is a poor, high crime neighborhood. Why that happened is a completely different story - but that is the fact of todays life. While namesake of the area, Albany is not the leader, its a very sick place which needs help.

"As for recognizing.. My feeling is that today Albany is a poor, high crime neighborhood. Why that happened is a completely different story - but that is the fact of todays life. While namesake of the area, Albany is not the leader, its a very sick place which needs help."

This is an excellent way to completely erase the credibility of everything else you've said. Outdated opinions aren't "facts of life."

Mike, some responses to your excellent questions:

"Fire.. I am not so sure how that works. Given a handful of high-rise buildings, and required fire equipment - city can well bill the state for services which wouldn't be needed otherwise."

Fire response to state-owned buildings is done by the city of Albany fire department. In other words it's paid for 100% by the citizens of the city, not the commuters who are benefiting. Anyone can verify what I am saying by, say, looking at the markings on the fire trucks next time you see one at the Plaza.

You're right that the city could theoretically bill the State. The fact is that they don't. if they billed, would the State pay? if the State didn't pay a bill, would the city refuse to respond to a 911 call? That's illegal.


"Roads - actually a small part of city budget, and many larger roads are state maintained. Not sure how that works with snow, though."

Local roads are a mix of state, county and city. Snow removal within the city lines is 100% a city expense. Again - city residents pay all of it even though commuters benefit.

Before anyone protests that city snow removal is lousy quality - yes, it often is. Pay your fair share and maybe it will improve.

"Safety - as in medical - I thought those things are billed to insurance." Ambulance services are contracted by the city or are part of the fire department.

Just a point of comparison, Clifton Park does not even have a local police force. They rely on county sheriffs and NY State Police. So, rich irony here - the below-average income residents of Albany subsidize the above-average income people of Clifton Park by helping to pay for their police protection.

"Would there be any other business if state offices was not there? Complicated question"

Excellent point, As I acknowledged above, if State government wasn't here, we'd probably look a lot like Utica, i.e., small and depressed.

But we do have state government and we're going to continue to. And the city is forced to support those costs. Really all I am saying is: the city of albany subsidizes the entire region. That's why the city is poor and the suburbs are wealthy. And that is a matter of public policy, not dumb-ass local government (even though we DO have thoroughly dumb-ass local government).

Stan - as always, things are even more complicated.
Clifton park pays for police - page I3 of last budget, police contract $775k plus non-LEO security. As far as I understand, it is not uncommon for smaller municipalities to hand out enforcement to state/county for a fee. Especially common for municipalities too small to support their own police force - although Clifton park is not a small one. Crime rate there is well below average, though..

And another thing to understand - there are many other ways of redistributing money. Sales tax redistribution is one of those: tax is collected by county and big part of it redistributed on per capita basis. That definitely benefits Albany.

Another fine print with state aid discussed here - it is given mostly to CITIES. At the same time TOWNS get an even shorter end of the stick. This article complains about low 3-digit per capita for Albany. Guilderland and Colonie get single digits per capita.

Overall, I don't think Albany is subsidizing anyone - it suffers from high crime rate mostly.

"My feeling is that today Albany is a poor, high crime neighborhood. Why that happened is a completely different story - but that is the fact of todays life. While namesake of the area, Albany is not the leader, its a very sick place which needs help."

You're mixing up two different things. This discussion is about Albany City government finances, not the wealth or poverty of the citizens except as it impacts ability to pay taxes.

But Albany isn't 'sick' it is providing the wealth creation engine of this entire region.

Mike, good point on sales tax distribution. It is an available mechanism for directing money back into Albany from the suburbs.

This is an issue that cannot be blamed on the State. This is completely local.

The fact is the corruption of Albany county government is just beyond human comprehension. And last year most of the incumbents were re-elected.

Stan, I don't see corruption as a key problem here. Sure it affects things, but only to some extent.
Disposable income directly relates to ability of businesses to function. Resident wealth affects services required from the government.
Crime rate - does it relate to wealth? I wouldn't be surprised. And definitely that relates to APD being single biggest expense.


Albany is not a "poor, crime ridden city." This is simply not factually true. There are certainly neighborhoods in Albany that are but not the city as a whole. The crime rate in Albany is higher than the national average but nowhere near other places like Chicago or Baltimore and only a bit higher than Denver's. The City-Data Crime Index gives Albany a 384 score versus a 284 score for the national average. For comparison Denver's is 354, and Denver is usually seen as a very desirable city. The median household income in Albany is roughly $43,000 which is lower than the national median of $55,000, but Albany also has 25,000 college and graduate students who make very little money and this artificially depresses the median income of the city. I think many suburbanites equate Albany with Arbor Hill or the South End because this is what they see when they drive in to go downtown. These are not the "typical" neighborhoods of the city though. They don't see Buckingham, Melrose, Helderberg, etc, or many of the other "nicer" neighborhoods. I know people in Clifton Park who have said to my face "I suppose Albany has one nice street." The quote illustrates a deep ignorance.

Thanks Paul, I was a little perplexed by Mike's narrative too, especially referring to Albany as a "neighborhood". Albany is 30+ neighborhoods (depending on how you count them), they are demographically diverse, and the City must serve all of them plus the 65,000 people commuting into Albany daily.

Do some areas of the city have crime issues? Certainly. But neither our crime rates nor median income are particularly unusual given our situation (size, location, climate, industries, most importantly capitol city status).

-B - if you look at capital district as a single area, municipalities are just neighborhoods. Actually finely divided region is also part of a problem, I would say.
As for crime rates..
http://www.timesunion.com/tuplus-local/article/Troy-ranks-No-1-in-crime-in-Capital-Region-6662245.php - look at the graph one screen down.

The "jobs" argument is not as strong as you think. I would wager that a large percentage of the Albany based jobs are filled with people living in the suburbs rather than the city. the State ought to release the former Greyhound site TO THE CITY for re-development. (Same is true for the State Office Campus--lots of potential there to make the City and Guilderland a much more viable region. The loss of tax base is significant...and grows with each expansion---from taking Union Station off the tax rolls to develop it as an incubator to the Fuller Road dorms and the entire Nanotech college campus--tax free.

The State pays school districts and towns "PILOT" (Payment In Lieu Of Taxes) for Forest lands in the Adirondacks, and even for the ten towns/school districts that were submerged when the dams were built and what is now Sacandaga Lake was formed (back in the 1930s!). So paying localities for State facilities (here in albany and guilderland--SUNY campus, State Office Campus, etc) makes sense and has long history of precedents.

The Mayor and City Council have PLENTY of work to do to make develop its economy and increase the city's "live-ability", but the State is underpaying for its presence.

If you look at the county as a single area, states are just cities.

If you look at animals as a single thing, chickens are just Buffalo wings.

If you look at the Internet as single tube, websites are just All Over Albany.

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