Weitzman: N.Y. Must Clean Up Special Taxing Districts

Weitzman: N.Y. Must Clean Up Special Taxing Districts
By Howard Weitzman
Posted on 3/20/08

NEW YORK -- Systems of government can be changed by an election, a revolution, or sometimes even a tea party. Change is an American tradition that started more than 235 years ago when taxpayers grew dissatisfied with their ruling government and what they viewed as an unfair tax burden.

One could say that New York state, and especially Nassau County, is undergoing a revolution of sorts today. Taxpayers in Nassau are feeling the burden of backbreaking taxes that continue to escalate, and are now asking for an end to high property taxes and wasteful spending practices.

Nowhere is wasteful spending more apparent than in the archaic form of government called “special taxing districts.” These special taxing governmental units were created during the suburbanization of Long Island to respond to the needs of residents by providing services, such as garbage collection, without creating a central government to provide all services. However, throughout the post-World War II era, they have come to be synonymous with high property taxes and government waste.

The call to reform special taxing districts may have appeared initially as a popular political position to target incumbents who, up until recently, had done little but talked about the waste and abuse. However, as taxes have risen and abuses have been uncovered, civic activists and elected officials believe the time has come and in fact is long overdue to wrestle this beast to the ground and take control of our destiny.

New York state has more than 6,900 special taxing districts, but no county surpasses Nassau when it comes to commissioner-run special districts, with more than 200. The special taxing districts in Nassau County levied more than $491 million in property taxes in 2007, and collected additional funds in user fees, licenses and penalties.

Until just a few years ago, most taxpayers probably could not tell you how much they paid for garbage collection, water or fire protection. The majority of homeowners would pay their property tax bill through their mortgage company and never give a second thought to what their neighbor a few blocks over was paying for the same services. Until recently, the average taxpayer was probably unaware that water district commissioners are elected or that residents can vote in a garbage district election. But what an education we have all received!

Over the past four years my office has taken a leadership role in addressing the issue of special taxing districts. We started by conducting a series of audits of sanitation, water and sewage districts. In 2005, a series of town sanitary district audits in Nassau County found serious financial mismanagement, a lack of oversight, few written policies and procedures, overspending, no-bid contracts, no-show jobs, and questionable employment and benefit practices. One water district had 15 employees -- seven of whom were related to each other. In one garbage district, health insurance was purchased through a no-bid contract from a broker, at $300,000 more than even the best health insurance state government offers. In one sanitary district, only 14 votes were cast in an election, and several of the voters had the same last name and home address as the commissioners. Water commissioners used Costco cards to purchase bottled water, courtesy of the district’s taxpayers. And the cost disparities my office found were mind boggling. Back door garbage pickup three times a week in one Nassau County community costs $371 a year per household, but just less than six miles away, the cost is $913 for the same services. Water provided by the Westbury Water District costs about $330 a household, but a few short miles over in Jericho, the cost per household drops to $87.

My office found that hundreds of thousands of Nassau County residents were paying far too much for basic municipal services. It is almost as if, depending on where you live, that you are spinning a Wheel of Fortune to see what you pay. In addition to revealing some of the inequities in garbage collection, water and fire protection, the report also identified millions of dollars in potential savings for taxpayers.

In April 2007, the New York State Commission on Local Government Efficiency and Competitiveness was formed, which I am proud to serve on. The commission was charged with developing a plan to streamline local governments and end the cycle of continually skyrocketing property tax increases. Because New York’s local tax burden is the highest in the United States, high property tax rates negatively impact our competitive edge and ability to attract new businesses and residents.

The 15-member commission is examining the more than 4,200 local governments and 6,900 special districts in New York state, and recommending ways to eliminate, merge or consolidate some of these districts while improving services. These special taxing districts are just one more layer in the multiplicity of local governments that contributes to the high cost of government.

The commission, chaired by Stan Lundine, a former New York lieutenant governor, congressman and Jamestown mayor, is comprised of many current and former local government leaders. The commission’s work is supported by state agencies that are involved with local government, including the Department of State, the state Comptroller’s Office, the state Education Department, Empire State Development, the Governor’s Office of Regulatory Reform and the Division of the Budget. Ten commission members are the governor’s appointees The state comptroller and four legislative leaders each selected one member.

The commission issued the following proposals in the state’s 2008-2009 budget plan: