N.Y. cities seek revenue sources other than property taxes

ALBANY — If Syracuse raises property taxes 1 percent, the city would get about $300,000 in revenue. Its pension bill is rising by $15 million next year.

If the city of Rochester raised property taxes to its constitutional limit, it would bring in $32 million in additional revenue. That would only be enough to cover the city’s budget deficit for next year.

While much of the focus of upstate cities’ financial problems have been on rising costs for pensions and health care, they are dealing with just as many problems on the revenue side of their ledgers.

“There has been a fundamental change in these places,” Rochester Mayor Thomas Richards said. “That fundamental change means that we just can no longer generate enough revenue to pay our expenses.”

Property taxes and state aid are cities’ main revenue sources. But a dwindling manufacturing sector, a glut of vacant properties and growing poverty have made property taxes a less reliable foundation for their budgets.

“Either with abandoned properties or tax-exempt properties, you can get just so much out of the folks who are still able to pay taxes,” Comptroller Thomas DiNapoli said.

Yonkers, which has property values four times higher than the average of other upstate New York cities, has also struggled with revenue. Property values declined 24 percent from 2008 to 2011 in Yonkers, a report Tuesday from DiNapoli found.

Yonkers Mayor Mike Spano said last month that the city’s sales-tax revenue has increased in recent years, and there is some positive economic development. But it hasn’t made up for growing costs. He wants a state task force to look at cities’ problems.

“We still need to address the core issues that are facing cities,” he said after a budget hearing in Albany. “They will not be able to tax their way, cut their way nor borrow their way out of their issues. There needs to be a new matrix put in place.”

Last month, Moody’s Investors Services downgraded Binghamton’s credit rating and said it could take further steps against the city, citing its fiscal woes and diminishing tax base.