State Aid to the City of Albany The State of New York provides financial support to the City of Albany

through a variety of payments. The State, through its Office of General Services and the State Police, provides services for State office buildings that the city of Albany does not have to provide. Other cities must provide similar services for private office and college campus buildings within their borders. The two main sources of State aid to the City of Albany are from the Aid and Incentives for Municipalities (AIM) program and annual payments authorized through Section 19-A of the Public Lands Law (PILOT payment). For City Fiscal Year 2010, the AIM payment is $13 million and the 19-A payment is $23 million. On a combined basis, the per capita aid received by Albany from AIM and 19-A equals $380 – far higher than the per capita State aid received by comparable cities such as Schenectady and Utica. Other cities cited by the City of Albany as received disproportionately high State aid -- such as Buffalo, Rochester, Yonkers, and Syracuse – are inappropriate comparisons. These cities are home to dependent school districts, which are financed in part by municipal property tax levies. AIM Unrestricted local aid programs have evolved over time, beginning in 1946, as the Legislature sought to direct aid to cities it judged to be the most fiscally distressed. More recently, in 2005-06 multiple local aid programs were reformed and consolidated into AIM. Each municipality’s AIM was initially based on the amount of aid it had received under the programs AIM replaced. However, the state has since attempted to allocate AIM increases and decreases based on consistent, measurable criteria. In 2007-08 and 2008-09, AIM increases were awarded based on specified fiscal distress indicators; municipalities that received significantly less AIM per capita than their peers were also given additional increases to help lessen the disparity. But the state’s fiscal condition has since necessitated reductions in total AIM funding. In 2010-11 AIM was reduced by 5 percent for municipalities less reliant on AIM and by 2 percent for municipalities more reliant on AIM in hopes of limiting the impact on those municipalities most dependent on AIM. New York State is facing $37.2 billion in deficit over the next three fiscal years. There are simply no new resources to distribute. A request to increase one city’s AIM payment in a time of stagnant or declining funding would most likely require a reduction in AIM for other local governments. 19-A The City of Albany is unique with respect to 19-A payments. No other city or local government receives 19-A aid – yet five cities in New York have more tax-exempt property than Albany. The Albany 19-A payments are the result of a City/State agreement in 2000 to provide funding to acknowledge the presence of the Empire State Plaza in the City. Since the original 2000 agreement, five separate modifications have been enacted. These changes increased the gross amount of the 19-A payments from $269 million to $507 million; and also resulted in a larger portion of the payments occurring in the early years of the agreement. For example, the City would have received $72 million through 2010 under the original agreement. After the various amendments, the City will have received $154 million through 2010. Moreover, the $15 million payment that will be made in 2011 under the current 19-A statute remains $5.15 million – or 53% -- higher than the payment that would have occurred under the original 2000 agreement.

As noted, the city of Albany ranks 6th in terms of percentage of exempt taxable value with 55.5%, trailing the cities of Ogdensburg (64.1%) and neighboring Troy (60.2%), among others. While property tax exempt organizations affect multiple cities, not just Albany, no other city receives 19-A payments.

Cities Ranked by Percent of Full Value Exempt, 2009 Assessment Rolls
No. of Exemptions Rank County 1 Ogdensburg 2 Ithaca 3 Troy 4 Salamanca 5 Geneva 6 Albany 7 Watervliet 8 Dunkirk 9 Olean 10 Oneonta 1,064 981 3,127 1,313 1,138 7,028 626 1,458 1,375 586 491,519 2,423,892 2,878,744 146,148 527,211 6,456,257 467,212 364,196 539,345 553,662 Exempt Value $0 Pct. of Value Exempt 64.06% 62.09% 60.19% 59.88% 59.18% 55.50% 54.56% 53.86% 52.09% 51.71%

Other Payments to the City of Albany In addition to the Empire State Plaza PILOT, the State also makes the following annual payments to the City of Albany:

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OSC Building (110 State Street): The State pays an annual PILOT of $439,000. DEC Building (625 Broadway): The State pays school, city, county, and miscellaneous property taxes on this building as a private owner would. The value of these taxes is $3.3M in 2010-11. OMH/OPW Building (44 Holland Avenue): The State pays school, city, county, and miscellaneous property taxes on this building as a private owner would. The value of these taxes is $945,000 in 2010-11. Albany Convention Center Authority: The State has provided $12 million through the Empire State Development Corporation. to the authority for design work and land purchases around the proposed site. The $12 million was part of $75 million appropriated for the authority in the 2006-07 State budget and re-appropriated each year since.

Additionally, the State rents office space in many privately owned buildings in the City of Albany that pay property taxes. For example, One Commerce Plaza houses offices of the State Insurance Department and Office of Temporary and Disability Assistance, among others. State Services Albany expresses concern about that the drain on municipal services caused by the State properties. However, this ignores the fact that the State provides many services that municipalities typically provide to tax-exempt entities, including:

Police: State troopers patrol many of the State owned properties in the City. SUNY Police provide coverage to SUNY Albany. Surrounding areas receive an intrinsic value from this large police presence. Water and Sewer: The State reimburses the City for the cost of providing these services. In previous years, the Albany Water Board has increased rates paid by the State while keeping rates unchanged for all other payers. Road Maintenance: The State, through SUNY, OGS and the Department of Transportation provide road maintenance services, including general maintenance, paving, and snow removal for many State owned properties. Cultural Events: The State, through OGS, also holds many cultural events (including 4th of July celebrations and others) that benefit the City.

Conclusion In addition to the direct payments and services provided to the City of Albany, it is critical to note the intrinsic economic value and multiplier effect of the thousands of State employees who work in Albany and the Legislative staff, lobbyists, press and constituents who come from across the State to spend days and weeks at a time in Albany. These employees and visitors create a significant economic impact through hotels, restaurants and other venues; this advantage is not available to other cities throughout the State. Finally, the State has also made region-changing investments at the nanotech campus at SUNY Albany, bringing high-tech, well paying jobs to the area.

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