As Monroe County lawmakers ponder the trade of sales tax money for Medicaid relief, a new report came out that spelled out local governments relationship to the tax.

Simply put: It’s a growing addiction.

State Comptroller Alan Hevesi’s office issued a report on sales taxes in New York State that’s worth reading.

In brief the Hevesi report stated that:

***New York State has one of the highest combined state/local sales tax rates in the U.S.

***On the whole, counties are more reliant on sales taxes … even exceeding the amount collected from property taxes. In 1994, county sales taxes represented 20 percent of revenue while property taxes were 26 percent of revenue. In 2004 county sales tax revenue was up to 26 percent while the property tax was at 25 percent.

***In 2004 Monroe County, however, got $118 million from sales taxes but far more, 268 million, from the property tax. Meanwhile, the city of Rochester took in about $20 million more from the sales tax than its property tax.

***As Internet sales of goods grows in popularity, so will the amount of uncollected sales taxes. And that will mean a growing loss from this revenue source.

***The Finger Lakes Region is tied for the slowest rate of growth in sales taxes over the last six years.

***Forty three of the 57 counties in the state (outside of New York City) share the sales tax proceeds. But they share at different levels. The county that shares the most? Monroe County… which keeps only 31 percent of the total take.

Is it any wonder that Monroe County lawmakers want to get more from the sales tax… which is why they are breathing so heavily for that Medicaid Sales Tax Intercept. The plan, of course, was tabled at the Ways and Means Committee meeting a few weeks back – which was just what the Republican President of the county legislature, Wayne Zyra, said he desired.

So while we wait for that shoe to drop, remember that Monroe County believes it has good reason to feel as though it has done plenty for others with the sales tax money. And now maybe it wants a little more help from the tax for itself.

Hey… just in case you missed it….the weekly Political Notebook on WXXI-AM 1370 (done during Morning Edition each Monday after 8:30 a.m.)… focused on a few topics of note.

We get into to the departure of Randy Daniels… the honeymoon for Bob Duffy… and the idea that all politics is local.

Go here and have a listen.

This may not sound like a locally-based column. But stick with it… it is.

All politics is local. It’s a phrase attributed to former speaker Tip O’Neill. Heck, he wrote a book with it as the title. This year, the phrase has been embraced by Republicans running for reelection in the House. But it’s always been followed by the incumbent class.

But, I wonder… at what cost do we all follow this belief? How harmful is following this idea?

For example, last week Rep. Tom Reynolds spoke with NPR on Tuesday about the GOP’s chances for winning post-Tom DeLay.

Reynolds talked confidently (he always does) about his party’s ability to keep control of the House (Check it out here). As you might know, Reynolds heads up the House Republican Campaign Committee. And what did he tell the NPR interviewer? He gave him the growing theme for a GOP that wants to shed the DeLay scandal (not to mention President Bush’s tumbling popularity) – that all Congressional elections are local.

These elections, Reynolds said, aren’t based on national issues, national news stories… such as those about a congressman who is stepping down because of his ties to a disgraced lobbyist. No, no. All politics is local. Reynolds spoke about the leading issue in his own district – jobs. He didn’t talk about his challenger, Democrat Jack Davis, who is slamming Reynolds and the Republicans in Congress for promoting trade initiatives that he says harm local workers.

His premise boils down to this – you vote the guy, the gal… not the party. You vote for the person who roams the district with his or her hand outstretched asking for your vote, eating the chicken at the local fair.

"It’s all about what each district has going for itself," Reynolds said. "Some, like mine, are talking about jobs… others may be talking about border security. Whatever it is… we believes its between both the incumbents and the candidates and their districts making it all politics is local."

So what’s the problem with this? Plenty, if that’s really the way we all approach elections to legislative bodies.

Reynolds may come from Western New York. And he may even be a likable fellow who relates well to Western New Yorkers in his 26th Congressional District.

But that approach disregards something. Reynolds runs as a Republican. As a member of the House, he is part of the Republican caucus. And – for better or for worse – he plays along with the team he chose. This is how a party in power – well…. uses its power.

So are you really just voting for Reynolds because he’s a great guy, who understands the concerns of his district? Doesn’t the team he plays for have any place in the vote you cast.

Are you really just voting for, say, Assembly Member Susan John, because she’s got the pulse of her Monroe County district? Is this all that’s behind your vote? Take a look at this article . John defends and supports labor in the argument for workers compensation reform. Nothing wrong with that on the surface. She clearly values the labor movement. She ought to, as head of the Labor Committee in the Assembly. It’s a position she attained because of the power structure in the Assembly, who appointed her to the post.

But, how does that make John local?

And we all know how legislative members like to go back to the district during election years and tell the voters  – "don’t forget, I know how to bring back important things for you." You know… goodies like money for local projects. They call them member items in the state capitol. A less flattering name is pork (just ask the Center for Governmental Research).

It sounds great on the local level…. just check out all the projects on this vast list that went to the Rochester area (thanks to the Empire Center for New York State Policy). What better way to show that a representative is really look out for his/her constituents than by showing the voters in his/her area the pork brought home. Why Sen. Jim Alesi has a music series at Eastman named after him. Why would he put his name there? All politics is local, right?

I’m not arguing that this premise is false. It’s a time-tested way to win reelection for incumbents.

I’m just saying that to forget that Reynolds is a member of the ruling Republican Party in the House… or that John is part of the Democrats in control of the Assembly… or that Alesi sits with the GOP majority in the State Senate… is to forget something vitally important. They help sustain that ruling majority. They are a part of it. And so… shouldn’t the decisions made by that ruling party reflect on the team members in their district come Election Day?

Maybe we could change that Tip O’Neill saying… turn it into this: All votes are local. And all voters have a choice about how they base their decision.

Well, a deadline is met again and New York State budget preparers jump up to take credit like a "D" student who has finally learned he needs to do his homework on time.

But has the "D" student turned in something that will make the grade? How is this state budget that sets (another) new record for spending being judged? Well, if you were simply to listen and read the comments and quotes about it… you might get a headache. Or you might think there is a strong bout of collective bi-polar disorder out there:

—"It’s an accountable, responsible, responsive budget." said State Sen. Majority Leader Joe Bruno to Karen DeWitt on 3/30/06.

—"The budget approved by the Legislature will be politically popular, but it is fiscally irresponsible." Press release from Tom Suozzi’s campaign. Suozzi is a Democrat running for governor on 3/29/06

As you know by now, this budget has something for everyone. Tax rebate checks for voters (just in time for the fall elections), increases for every conceivable local government. In Rochester, Bob Duffy and Manuel Rivera (the mayor and the city schools superintendent respectively) are beside themselves with excitement over the increase they landed in the budget. And so are others:

—"$11.2 Billion Albany Win for Mike on Ed Spending" – New York Daily News headline on NYC Mayor Mike Bloomberg’s reaction to landing more cash for school aid.

—"Last night at around 9:30 I was literally jumping up and down on my couch in my (Albany) office." – State Sen. Nicholas Spano, R-Yonkers, in a quote to the Journal News on 3/30/06. This was in reaction to more state aid for the city of Yonkers.

Well… some others:

—"In the New York of the real world, we can not afford a government that operates like this." – The New York State Business Council, a letter to Assembly Speaker Sheldon Silver and a press release on 3/29/06.

—"Today the Legislature is passing a tax, spend and borrow plan that will lead to very large out year deficits. Their budget not only dramatically increases spending, but provides no reform of the two areas with the largest spending growth – Medicaid and education." – John Faso, Republican running for governor in a press statement on 3/31/06.

But surely everything is okay for the governor… and those who want to replace George Pataki next year:

—"We are assuming the governor will see the wisdom of our budget."- Assembly Speaker Sheldon Silver to the Jay Gallagher and Cara Matthews of GNS on 3/29/06, talking about Pataki’s willingness to accept this budget plan.

—"The whole thing is like a big, exploding cigar for the next governor. ‘Here’s a Cuban’ … Boom!" – E.J. McMahon, director of the Manhattan Institute’s Empire Center for New York State Policy, in an Associated Press report on 3/29/06.

—"Like everyone else, I am wary about the way spending is being increased at some levels." – said Eliot Spitzer, the Democratic candidate for governor in the same article.

But what did you expect… this was a budget with a surplus. And what else do you do with a surplus. You give it back, right?:

—"One of the things that is very important to me is that the state give back to hardworking taxpayers their money." – state Sen. Thomas W. Libous, R-Binghamton to Binghamton Press and Sun Bulletin on 3/30/06, on the end of year budget surplus.

—"Legislative leaders are passing up a chance to reduce New York state’s excessive debt burden — already one of the highest in the nation — and to achieve structural balance between revenues and spending." Citizens Budget Commission statement on 3/29/06.

—"Even when the state is flush with money, the poor don’t get a cut of the pie." – Mark Dunlea, Associate Director of Hunger Action, a press release on 3/29/06

—"Nobody seems willing or able to stop the politicians in Albany from spending themselves into serious fiscal trouble, not so much for the budget year ahead but for many years after."- Newsday Editorial on 3/26/06

So what do we say about the "D" student who gets his homework in on time? Most of us don’t pat him on the head for simply meeting a deadline. We say "about time." But in this state, we are not yet grappling with what the student has wrought with the latest budget assignment. It’s spending more than before. It’s giving away plenty. But somehow we know that it still has begun to scratch the surface when it comes to Albany’s fiscal situation. And so the reaction sounds slightly inconsistent from report to report. Sometimes within the same report – by the same source.

—"If we didn’t get the state aid increase at that level, I never would have been able to deliver a budget with a 0-percent tax increase." Shawn Hogan, mayor of Steuben County city of Hornell, to the Hornell Evening Tribune on 3/30/06.

—"I think we spend too much money in New York state. I think we need to rein in that spending." – The same Mayor Hogan in the same article.

I don’t blame Hogan. I think we’re all a bit in a bind at what’s being offered by Albany.

At least it’s on time… I guess.

Rochester vs. Buffalo?

How about Rochester and Buffalo. And Syracuse for that matter.

On the same day that this area’s press reported an increase in state aid for Rochester and called it a team victory led by Mayor Bob Duffy the Buffalo News had a different story. The cities of Rochester and Buffalo, the Buffalo paper reported, had the same lobbying firm working on their behalf in Albany.

So it appears the hard-working, miles-driving Duffy had some help. Now, no one would begrudge him professional lobbying for such an endeavor. He’d be crazy not to do it. It’s part of doing business in Albany.

And the spokespersons for both Duffy and Buffalo Mayor Byron Brown told the News that they were fine with the two cities using the same firm. Of course they were.

Because the win on Friday wasn’t just a win for Rochester (and please remember that the brokered deal in a Senate-Assembly conference committee still needs to be approved as part of a final budget). Everybody got a nice piece of the action.

Just compare what the two cities were going to get under Gov. George Pataki’s proposed budget and what the tentative deal for more state aid to cities gives them.

—Rochester’s recommended funding from Pataki’s budget – $59.6 million. The latest legislative proposal gives the city $71.6 million

—Buffalo’s recommended amount in the governor’s budget – $128.6 million. Friday’s legislative deal gives that city $142.3 million.

Now let’s add in Syracuse for good measure. They moved from $54.2 million under the Pataki budget proposal to $63.2 million under this latest deal brokered by the Senate-Assembly committee. (Here was the Syracuse paper’s story – a more subdued take. Yonkers made out similarly well.

Go figure that calls for more money would be heard by state legislators during an even-numbered (meaning election) year. Shocking. And the conga line for that state cash is starting to file in.

So are these state lawmakers and the governor making the hard choices – finding places to reduce for those they increase? Are you kidding. The governor’s proposed budget back in January was a 4.1% spending increase — and that’s without the additions being plopped in since then, like the increased aid to cities.

You might have thought that New York state was dealing with tough economic times. Or at least Upstate New York. You would have thought this would create a budgetary mindset that identifies the most important services for continued financing and then looks to reduce those deemed less worthy. In other words, creating a priority list. But the state doesn’t go for such things.

Will Bob Duffy? Go back to the story by Brian Sharp in the Democrat and Chronicle and you’ll find something worth clipping. Duffy says that things will change in the city budget. He seeks efficiency. He says cuts are coming. He asks for patience from the public. We should give it.

Because that’s when Duffy’s real work begins, or at least ought to begin. He should make the hard choices…  and that means some will have to lose out. Avoiding them means letting everyone win. And then who loses.

So you’ve read plenty here about the Medicaid remedy that could very well be a sales tax nightmare in Monroe County.

Take a listen as the head of the Town Supervisor’s Association in the county explains why the sales tax "intercept" would be tough on their budgets. But also listen as the president, Tracy Logel, talks about how it should get everyone to stampede toward Albany.

And listen for a question… can the sales tax "intercept" be separated from the sales tax sharing?

Use the comments section below for your answer, if you like. But first click over to the audio file and have a listen.

So Joe Robach is screaming about Rochester’s fair share.

And Mayor Bob Duffy organizes demonstrations with his "Fair Share Coalition" to show why the city needs more state aid.

Meanwhile Superintendent Manuel Rivera releases a budget that requires much more in Albany money.

And then yesterday the state courts reaffirm a court order to increase state dollars in the billions of dollars to New York City schools. The massive increase in aid to city schools must be done as
part of this budget negotiation, according to the court ruling.

This space asked this just a few weeks ago… and it will ask it again. With everyone sticking their hand out for more… do these people expect that someone else with do with less? Duffy told the Democrat and Chronicle that he never meant for Buffalo or Syracuse or Yonkers to get less in state aid for Rochester to get more. So does the money come from another state budget item?

Or does it mean new taxes… or fees… or an increase in existing taxes and fees?

Why is it that we never hear people in government talk about the idea of making priorities? Cities need it then we’ll take if from (fill in the blank). Schools need it then we’ll raise the (tax/fee/revenue) to cover it. Instead we have a mentality of rushing to the trough. Those who shove their weight around the best gets the snout in deepest.

And, finally, how does all this boosting of state aid and required additional spending jibe with the other big call we hear directed at the state of New York: That it needs to cut the cost of government to be more competitive?

So let me get this straight – when Eliot Spitzer likens Upstate New York’s economy to Appalachia – it’s a slur.

But when Assemblyman Joe Morelle says virtually the same thing a month earlier (as a rebuke to a rosy picture of the Upstate economy painted by an Empire State Development Corporation official) — well, then no one is bothered.

Spitzer’s link of Upstate’s economic woes and Appalachia is a problem.

But when the lead sentence of a 2004 report by an affiliate of the New York State Business Council says "Is Upstate New York going the way of Appalachia?"– well, that’s no biggie. (This item is contained in a report by Albany correspondent Karen DeWitt )

Republican gubernatorial candidate Randy Daniels was among the GOP folks offended by the remarks (or at least his spokesman was). I suppose the man who once was New York State’s alternate to the Appalachian Regional Commission ought to weigh in on this. I guess.

Republicans are making this out to be akin to when 1982 gubernatorial candidate Ed Koch talked about upstaters wearing gingham dresses. Koch, of course, was talking blithely about upstate – characterizing it. And doing it falsely.

Does the same sense of falsehood come through with Spitzer’s comment? Ask Sandy Parker, our Rochester Business Alliance president. I’m sure those who want to see a serious debate about curing Upstate’s economic ills are thrilled about this debate over the applicability of "Appalachia."

Far be it for anyone to suggest that this is the political equivalent of throwing anything against a wall to see if it sticks.

Here’s what sharing has gotten us in the Rochester-Monroe County region: An acute awareness.

Because of sharing – specifically the sales tax money – leaders from the county government down to the smallest village will understand the pain of unbridled increases in Medicaid spending. That awareness could lead government leaders here to be a unified voice aimed at Albany

The problem, however, is that few other areas may join in any potential lobbying effort. That’s because the sharing you see in Monroe County doesn’t happen in most other places.

We have chronicled how a state legislative remedy called the sales tax intercept may be the escape hatch Monroe County leaders are looking for. The county is desperately trying to get away from the increases in Medicaid costs – and a provision in the state’s 2005 reform of Medicaid essentially allows the county to trade a big slice of sales tax proceeds for the responsibility of paying into Medicaid. Monroe County wants to do it. Some want it badly.

As we’ve also told you, Monroe County has a unique set of circumstances with sales taxes. It shares far more – far more – of the revenue with the city of Rochester, along with other municipalities and suburban schools within its borders. Predictably the leaders of local governments and school districts are up in arms over the prospect of losing sales tax revenue. As we will report on WXXI’s Need to Know program this Friday,  the president of the town supervisors association says the organization will take a stand opposing this.

But… and here’s the point… the president of that association said the towns should not just dig in their heels, cross their arms and look the other way.

Town Supervisor Association president, and Chili Supervisor Tracy Logel, believes that town and village leaders, the school district board members, all ought to lock their arms with County Executive Maggie Brooks, storm Albany and tell them to radically alter how the state spends on the Medicaid program. Logel ought to know. Before she became Chili’s supervisor, she was a Monroe County Legislator who passed budget after budget. She served as the legislature’s chair of the Human Service Committee, which oversaw Medicaid. She knows the bind the county is in.

This solidarity was something County Legislative President Wayne Zyra hoped for as a byproduct when he proposed the county opt into the "intercept" solution. Everyone screaming at Albany.

It’s amazing what it takes to galvanize a group. Just make sure the circumstance dips into a person’s  wallet. That’s what we have here in Monroe County. (And let me be clear – this still could spin out of control into bickering, rather than solidarity. Especially when it gets to alternatives – which the town supervisors association will admit they lack).

But should Rochester-Monroe County get some kind of lobbying voice – the region may be awfully lonely. Most of the counties who receive sales taxes share little of the money. There won’t be a political tug-of-war when the vast majority of county governments decide whether or not to accept the "intercept." No shared pain… no direct impact. No galvanizing force.

So the conversation on Medicaid spending that may start strong here could wane once it crosses the county line.

It’s a shame, really. It’s a conversation that everyone in New York ought to be having.

One last word on the sales tax intercept: It’s a real possibility… and you can bet it will mean angst among those who run governments here. (Click here then here for the previous columns)

Just listen to County Executive Maggie Brooks talk like a government leader stuck between that rock and that hard place.

"The intercept – on its own – is divisive. It solves our problem, but at what cost," she said soon after Monroe County’s Legislative President Wayne Zyra introduced legislation to embrace the move.

But then Brooks added this: "The intercept can be part of the solution."

So she’s willing to talk. Brooks won’t do the "intercept" solution alone… but would go forward if it were paired up with something else that would make the other municipalities feel the bite less.

This means negotiation. And that means ruffling feathers. Because such a conversation will get under the skin of town supervisors, suburban school board members and village mayors.

The "intercept" is more divisive in Monroe County than it would be anywhere else in the state. That’s because of the way the sales tax money gets divvied up here. Most counties take a large share… if not all of the share… of the sales tax for localities.

Not Monroe County. Formulas dating back 20 years – including the now famous pact brokered by former County Executive Lucien Morin and former Mayor Tom Ryan – pushes out millions of dollars to government bank accounts large and small. Look at the breakdown using actual numbers from 2004:

**Monroe County – $117.4 million
**Rochester – $117.4 million
**The county’s 19 towns – $77.1 million
**The county’s 10 villages – $8.5 million
**The 24 suburban school districts in the county – $53.9 million.
(Go here for a fuller accounting)

These are big numbers. The kind of dollars that are essential to leaders in Gates and the Greece school district and East Rochester. To enact this "intercept" would mean a reduction in the tens of millions of dollars for local governments.

Brooks doesn’t want to sting the locals. But she can’t take the idea off the table. It’s the only solution that could eliminate the Medicaid burden, one that gets weightier as each year goes by.

Give Wayne Zyra credit for putting this out there now… and not springing the sales tax "intercept" on unsuspecting municipalities at the last minute. Give Brooks some as well for not dismissing it out of hand.

And over the next months (could be six, could be nine, could be twelve)… the political class of Monroe County get to relive the debating.. the politicking… the negotiating around the big dollars raised by taxes on purchases. In the past, those talks have sometimes lead to an amicable solution. And sometimes those talks have gotten ugly.

How will it be this time around?