Tuesday, August 02, 2011

Whither Westchester? Part Two: The High Cost of Villaging


      Westchester residents pay the highest taxes of any county in the United States. That’s an incontrovertible fact. Why this is so—and why residents do nothing about it—is less obvious. As a result of living in an incorporated village, about a fifth of a million residents of Westchester villages pay four levels of taxation, one more than the rest of Westchester County.
      Croton is one of the twenty-odd communities that levy this extra layer of property taxes. The impact of four layers of taxation was acknowledged in the February 2010 Newsletter published by the Village of Croton-on-Hudson and intended to keep residents informed: “The property taxes each Village resident pays during the year are distributed to four entities--the School District, the Village (of Croton-on-Hudson), the Town (of Cortlandt), and the County (of Westchester).
      “The amount of your School, Town and County tax bill is based upon the Town’s assessment of your property value. Your Village tax bill is based on the Village’s assessment of your property. Village taxes are the second largest component of your yearly taxes, with the School taxes being first and the County and Town taxes representing smaller portions.” A significant piece of information in the above extract is, “Village taxes are the second largest component of your yearly taxes.” Curiously, when people rant about “big government,” they never take Westchester’s multi-layered government into account. But it is big government in every sense of the term, particularly because it has a now-superfluous layer of expensive and duplicative village government
In 1788, there were twenty towns and no incorporated villages and cities in the newly constituted Westchester County. Today, there are nineteen towns plus twenty villages in eight of these towns, and six cities independent of the towns. Three of the nineteen towns have organized themselves as anomalous town/villages. In the entire state that is New York with its 62 counties, there are 556 villages, and Westchester has 22 of them. One of the consequences of municipal incorporation is that every village soon acquired the appurtenances of business corporations—including an elaborate management structure. In fact, the heads of incorporated villages were originally called “President” until the title of Mayor was adopted to emulate the elected heads of cities.

Council-Manager Government
Long after incorporation, Croton adopted the council-manager form of government, an outgrowth of government practices of the late 1800s and early 1900s. when political “machines” and the abuses of the Spoils System (“to the victor belongs the spoils”) blighted many municipalities. Under the council-manager system, all governmental authority rests with a governing board, except for certain duties that are assigned by law to the manager or administrator. The manager is hired by and can be dismissed by the entire board.
Under the council-manager form of government the body called a city council or village council, board of selectmen or board of trustees is responsible for the legislative function of the municipality such as establishing policy, passing local ordinances, voting appropriations, and developing an overall vision for the village or other entity. The elected body appoints a manager to oversee the administrative operations, implement its policies, and advise it. If the position of mayor exists, the duties are usually primarily ceremonial. Sixty-seven of New York State's villages have village managers /administrators.
In Westchester, fourteen of its twenty villages and two of its three town/villages have adopted the council-manager form of government. These villages are Ardsley, Briarcliff Manor, Buchanan, Croton-on-Hudson, Dobbs Ferry, Hastings-on-Hudson, Irvington, Ossining, Pelham, Pelham Manor, Pleasantville, Port Chester, Rye Brook, and Tarrytown. The town/villages are Mount Kisco and Scarsdale.
Although the popularity of council-manager government has continued into the 21st century, the system as practiced has changed over time, particularly in communities that have grown more politically contentious. Their elected officials increasingly see themselves as political activists responding to a constituency and concentrating on narrow issues, rather than as trustees performing a public service and attending to the public welfare regardless of any political agenda, as in the traditional model. In Croton, far too much has been spent on outside planning consultants in a desperate attempt to increase revenues instead of reducing expenses. Ordinary common sense would have revealed an easy solution to Village problems: Dispense with its expensive, redundant and archaic village structure.

The High Cost of Villaging
The chief disadvantage of municipal incorporation is that in the 21st century Westchester’s villages are small and lack the potential for population growth. Too costly and outmoded to justify their continued existence, they add to the tax burden. Consider the string of villages that stretches along the Hudson between Yonkers and Peekskill. So uniform are they in the aspect they present, a motorist driving north along the old Albany Post Road that links these villages is hard-pressed to discern where one village leaves off and the next village begins,  Each is also top-heavy with redundant management superstructure and identical police, fire, garbage collection departments and duplicated personnel and equipment.
One of these, Croton-on-Hudson, is a typical example of the council-manager form of government. The four members of the village’s board of trustees earn $3,000 annually for their services; the mayor is paid $5,000 annually. The disparity between policy-making village board salaries and that of the policy-executing village manager is startling ($17,000 vs. $160,000.
Let us now examine the true cost of managing as exemplified by the annual salaries of Croton’s village management under this system. The parenthesized dollar amounts are the raises over last year’s salaries awarded to nonelected, appointed management employees  These raises averaged almost four percent at a time when Social Security beneficiaries received no cost-of-living supplement.)

Table 1: Cost of Croton’s “Top Management Team”
Village Manager: $160,000
Asistant Village Manager: $96,944 (+ $3,729)
Village Treasurer: $111,936 (+ $2 884)
Deputy Treasurer: $77,250 (+ $2,318)
Village Clerk: $85,284 (+ $2,700)
Deputy Village Clerk: $47,700 (+ $2,700)

TOTAL OF ABOVE SALARIES = $566,015 (+ $14,331)

The above six salaries totaling well over a half-million dollars are taken from the current budget for the fiscal year 2011-2012. Croton is a village with a population of slightly more than 8,000 persons, a budget of $17 million and more than 80 employees. If we compare the currently budgeted management salaries to a reasonable public service salary yardstick—the salaries of the governors of the fifty states--surprising statistics emerge. The village manager of Croton-on-Hudson earns more than the governors of 44 states!
Just to put this statistic in perspective, the salary of the village manager of the village of Croton-on-Hudson with its population of a shade more than 8,000 persons is more than that of the governors of such important states as Illinois (pop. 12.9 million); Washington (pop. 6.6 million); Connecticut (pop. 3.5 million); Maryland (pop. 5.7 million); Ohio (pop. 11.5 million); Massachusetts (pop. 6.5 million); and 37 other states. (Only the governors of California, New York, Michigan, New Jersey, Virginia and Pennsylvania are paid more than Croton’s village manager.)
Croton’s Village Treasurer makes more than the governors of twenty states. Croton’s Assistant Village Manager earns more than five governors in the U.S. Croton’s Village Clerk makes more than two state governors. And even its Deputy Treasurer makes more than the governor of the state of Maine. The following table tells the story.

Table 2: Salaries of U.S. Governors vs. Croton Management
California: $206,000
New York: $179,000
Michigan: $177,000
New Jersey: $175,000
Virginia: $175,000
Pennsylvania: $164,396
Illinois: $155,600
Washington: $150,595
Connecticut: $150,000
Maryland: $150,000
Ohio: $144,830
Vermont: $143,957
Nevada: $141,000
Massachusetts: $140,535
Oklahoma: $140,000
Kentucky: $137,506
Wisconsin: $137,092
Georgia: $135,281
Florida: $132,932
Delaware: $132,500
North Carolina: $130,629
Iowa: $130.000
Mississippi: $122,160
Minnesota: $120,303
Missouri: $120,087
Rhode Island: $117,817
Texas: $115,345
Alabama: $112,895
Hawaii: $112,000
New Mexico: $110,000
New Hampshire: $108,890
South Carolina: $106,078
Kansas: $105,889
Idaho: $105,560
South Dakota: $105,544
Nebraska: $105,000
Wyoming: $105,000
Utah: $104,100
Montana: $96,462
Arizona: $95,000
Indiana: $95,000
Louisiana: $95,000
West Virginia: $95,000
Oregon: $93,600
North Dakota: $92,483
Colorado: $90,000
Tennessee: $85,000
Arkansas: $80,848
Maine: $70,000

Some may point out that certain perks come with a governor’s salary—for example, the privilege of living in the executive mansion, usually a drafty old barn of a building through which gawking tourists regularly traipse. Governor Pataki so disliked living in the executive mansion in Albany, he chose to live in his house in Garrison, N.Y.
How does the current salary paid to Croton’s village manager stack up against salaries paid by other villages for the same job? Table 3 below shows the comparison. Note that the title may vary between village manager and village administrator in these figures arranged in ascending order.

Table 3. Salaries Paid to Village Managers
     Dobbs Ferry: $79,029 (VC)
     Buchanan: $110,902 (VM, VC, VT)
     Briarcliff Manor: 116,966 (IVM)
     Tarrytown: $120,184 (VA)
     Ardsley: $130,534 (VM)
     Elmsford: $135,000 (VA, VC)
     Irvington: ($138,000 (VA)
     Pelham Village: $142,225 (VA)
     Pleasantville: $144,371 (VA)
     Hastings: $157,188 (VM)
     Ossining: $160,000 (VM)
     Croton-on-Hudson: $160,000 (VM)
Job Title Code: IVM=Interim Village Manager; VA=Village    Administrator; VC= Village Clerk; VM=Village Manager; VT=Village Treasurer.

Expressed in pocketbook terms. Croton’s village manager’s salary costs every man, woman and child in Croton $20.20 each year. In terms of the cost per household, the figure is $54.96. Interestingly, Croton (pop. 8,070) pays the same salary ($160,000) to its village manager as does Ossining (pop. 25,060)--even though Croton is only a third of Ossining’s size. Thus, compared to Croton’s annual per capita cost of its village manager of, $20.20 Ossining’s is a mere $6.38.
Neighboring Buchanan’s village manager also performs the functions of village clerk and village treasurer for a base salary of $110.902. Croton spends a total of $566,015 for six persons to perform these same management functions. (Not shown in any tables are the very generous health and retirement benefits offered that continue for the lifetime of each retiree.)

Croton’s Overweening Generosity
Croton’s largesse as a village extends to other areas affecting taxation—namely the School Board and school taxes, the largest item. For example, the base salary of the former superintendent of Croton’s school system of only three schools and 1,685 students was $240,000 (plus a $20,500 tax-deferred annuity, a merit bonus of the maximum of $5,000 and a vehicle allowance of $7,200).
Contrast that salary with that of the superintendent of the Yonkers school system, with responsibility for 39 schools and 25,306 students--$235,000. Reflecting the School Board’s sudden awakening to costs, Croton’s new school superintendent receives $215,000 “and other benefits common to superintendent contracts in the county.”
Croton’s police chief, in charge of a 20-person department, receives a salary of $145,000, while Buchanan’s police chief is paid $109,000 to supervise a five-person police department. The salary of Ray Kelly, the head of the 37,000-person New York City police department, is $189,700.
Another source of taxpayer discontent is management’s practice of maintaining police departments at less than optimal strength. This results in expensive overtime practices that are often abused. Because their commuting populations empty many villages during daytime hours, the hitherto unanticipated prospect of paid fire department personnel may soon have to be considered to fill the gap left by daytime absences of volunteer firefighters.
Of Westchester’s twenty villages, fifteen have populations of less than 11,000. Thirteen of these twenty, including Croton, have populations of less than 8,000. Three of these twenty have populations less than 5,000. Yet all have the same top-heavy village structure administering budgets in the millions of dollars.
In New York City, agglomerations like Battery Park City; Peter Cooper Village, Stuyvesant Town, and Parkchester, not to mention entire square blocks of tall apartment houses on the Upper West Side, have similarly-sized populations. What if each of these had decided to incorporate as a village, with their own management, police, fire and sanitation departments? The result would resemble the chaotic picture of Westchester County villages today.
High taxes in small units of local government, such as villages, are also the result of ingrained practices that contribute to expenses. One is the method by which taxes are calculated by government. Politicians often run on platforms in which they promise to “run government like a business.” But businesses budget for the coming year by projecting the expected revenue (income) and adjust the next year’s expenses (payroll, number of employees. etc.) based on that projection. Local governments, on the other hand, project next year’s expenses (including payroll and benefits) and adjust the next year’s revenue (i.e. taxes) based on that projection. In effect, tax growth becomes a bottomless well that never runs dry.
In addition, local governments have made it a practice to give annual across-the board salary increases of two to three percent. What members of the Board of Trustees unfamiliar with the mathematical Rule of 72 don’t realize is that a three-percent raise each year will more than double a longtime employee’s salary in 24 years. This was the case with Croton’s previous village manager whose $196,340 salary in 2008 for “managing” a village of less than 8,000 persons was only slightly less than that of the governor of California, a state with a population of 36.5 million. 
    We are all aware of  big government’s tendency to replicate itself, much like amoeba or paramecium splitting into two in a drop of pond water on a microscope slide. In 1970, when its population was 7,523 persons, Croton’s affairs were managed by a Village Manager, a Village Treasurer and a Village Clerk. By 2010, Croton’s population had grown by only 547 persons--an average growth rate of 14 persons a year.
Such a minuscule increase over the past 40 years can hardly have made a perceptible difference in the respective work loads of Croton's manager, treasurer and clerk. Yet, in recent years, the village in its munificence has provided each with a generously remunerated assistant. 
The salaries of these six individuals now total well over a half-million dollars a year. No wonder Croton’s village government has been unable to provide its citizens with meaningful tax reduction.

Village vs. Hamlet or CDP
The inevitable question becomes, “What do villages offer that other communities, such as unincorporated hamlets and CDPs (Census-Designated Places), do not offer?” The answer is, “Little to nothing.” The Westchester community whose junior and senior high schools are consistently chosen as “best in Westchester” by U.S. News & World Report is not Croton but Edgemont. Before you say, “Edgemont—never heard of it,” you should know that Edgemont is not a village but an unincorporated hamlet in the town of Greenburgh, and has no top-heavy village superstructure and extra layer of village taxation.
Similarly, the community to which Croton residents most often aspire to relocate to for its quality of life and highly regarded school system is Chappaqua in the Town of New Castle. Again, Chappaqua is an unincorporated hamlet, not a village--but that only increases its attractiveness as a community, and removes the extra layer of village taxation.
Then there’s affluent Katonah, also a hamlet, one of three unincorporated hamlets in the Town of Bedford, and a destination for those seeking more-expensive homes. According to the Coldwell Banker Home Price Comparison Index, Katonah ranked as the most expensive housing market surveyed in New York. In the tri-state area, it is only surpassed by Greenwich, Conn., and Ridgefield, N.J. As residents of a hamlet, those who live in Katonah don’t have to worry about an annoying extra layer of village taxes despite their ability to pay.
Another example of a prosperous hamlet is Yorktown Heights in the Town of Yorktown, Its population closely matches Croton’s in size, but it is classified as a Census-Designated Place (CDP). Its residents get along very nicely without the burden—and onerous taxes—of an ultimately useless village superstructure.
Neither Edgemont, Chappaqua, Katonah nor Yorktown Heights seems to be suffering because of the absence of an elaborate village superstructure as a consequence of their failure to incorporate as villages. The quality of life in the Cortlandt hamlet of Montrose is no different from the quality of life in the village of Croton.
What advantage do Croton residents get from maintaining an elaborately structured village government with a budget of $17 million and more than 80 employees? The question inevitably becomes: Are we paying too much for what we get in return?

What Can Residents of Villages Do?
The Commission on Local Government Efficiency created by former Governor Spitzer to study ways to reduce the cost of government determined that a village is an inefficient and unnecessary form of government and should all be dissolved. There is a way for the twenty villages of Westchester County, including Croton, to throw off the yoke of village bureaucracy and lower their exorbitant taxes. Provision for the dissolution of villages is covered by New York State law and allows them to be absorbed by the town in which they are located. Reduction of taxes by dissolution of a village will make homes more affordable and make the community more attractive to new businesses. The people of a village like Croton must take only four steps to accomplish dissolution of its village structure. These are detailed in Article 19 of New York State’s Village Law and summarized on pages 72 and 73 of the Local Government Handbook, Sixth Edition (2009), published by the New York Department of State:

(1) A petition signed by at least one-third of the registered voters residing in the Village must be submitted to Croton’s Board of Trustees requesting that a proposition for dissolution be put before the voters on the next general election.
(2) A public hearing must be held to discuss the proposed dissolution of the Village of Croton.
(3) In cooperation with the Town of Cortlandt, the Croton Board of Trustees must develop a plan for disposition of Croton’s assets, payment of Croton’s debts, and the assumption of its services by the Town of Cortlandt. The plan will be part of the proposition of dissolution that will go before the voters.
(4) At the next general or special election, the voters will be asked to vote on the proposition of dissolution. If approved the Village must be dissolved according to the approved plan within one year.

That’s all there is to it. It’s as simple as those four steps outlined above. Other advantages will stem from dissolution of the village. Reduction of taxes will make homes more affordable and make the community more attractive to new businesses. There’s nothing revolutionary about the concept of dissolution. It would merely mark a return to the original town plan of Westchester’s founding fathers. Moreover, the Town of Cortlandt already performs for Town residents many of the Village services that would be transferred.
The chief benefits we get from living in the village of Croton and paying high village taxes are intrusive micromanagement of everyday life and the ability to say that we live in a village. Big deal! There is little that village government does in Croton that the Town of Cortlandt does not do—and does better. It should come as no surprise to learn that several other villages in New York State are in the process of dissolving.
Discontent with multi-layered, self-perpetuating anachronistic government and burdensome taxation for replicated services is spreading. Aside from turning incumbents out of office, what else can the people who live in the villages of Westchester do? They can strike a blow for freedom from oppressive taxes and unnecessary government by starting the simple process of village dissolution. Otherwise, they should stop complaining about high taxes and big government, and suffer in silence. Croton will still be Croton. Absent will be one whole layer of oppressive taxation—and what a great relief that will be.


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