MANDATES 101 – Basics

The mandates discussed here are laws passed by the New York State legislature which force local governments in NYS to do something or pay for something.   By “local governments,” we mean counties, school districts, and towns.   There are other, smaller governmental entities in NYS, fire districts for example.  These also are subject to mandates, and this discussion applies to them.   But for a clearer discussion, here we just refer to counties, school districts, and towns.

Mandates are State Spending in Local Budgets.

A mandate is a combination of two things, a government policy and the cost of implementing that policy.   The mandate requires government spending to make the policy happen.

To avoid confusion in discussing mandates, the policy/spending distinction must be clear.     The attention now being paid to pensions in the media and by NYS local elected officials illustrates this.   It’s not the existence of pensions that’s made NYC Mayor Bloomberg so outspoken in his third term as compared to his first two terms.  It’s the escalating, unsustainable pension spending that he’s concerned about.  And taxpayers have paid for pensions through their property taxes for years.   Like Mayor Bloomberg, their increased, vocal interest in pensions results from  spiraling pension spending, not the basic policy of providing pensions at all.

The pension problem is a lack of moderation as to cost.   Whenever opponents of pension reform knowingly or unknowingly mischaracterize all reformers as anti-pension or biased against pension recipients, they are diverting the conversation from the real problem – spending.   If a mandate reform opponent says things like, “You hate pensions,” or, “You’re attacking working people and policemen,” the mandate reformer replies, “No, and the proof is I’ve paid for pensions for years without a big fuss.  It’s the cost thing.   Pensions have become too much of a good thing for you.  The math doesn’t work.  The current system is unaffordable and unsustainable.”

The mandated spending discussed here appears in local budgets.    Someone accustomed to his own checking account and credit card statement assumes that the NYS legislature’s spending is in the state budget, a county legislature’s spending is in the county budget, a school board’s spending is in the school budget, and a town board’s in a town budget.  That’s correct in part.    But county, school, and town  budgets also contain mandated state spending which does not appear in the state budget and which was inserted by action of the NYS Legislature.    When people dip a teaspoon into the local government sugar bowl, they don’t expect to get a spoonful of state flour.

Some mandates seem free of any spending.  They consist of a regulation and don’t have an exact cost associated with them.   If instead of mailing state documents to local government offices, NYS emails their document to a county, school, or town, and orders local government to print and distribute the document, then no cost is specified in the state requirement.   But NYS just shifted to local government the costs of the employee’s time, the paper, the printer cartridges, and the distribution.   So we still refer to regulatory mandates as spending, because a cost of implementation is shifted out of the state budget and into a local budget.

Mandate spending is a big deal and involves big money.  For example, here’s Westchester County Executive Rob Astorino referring to a  prior Westchester County budget:

“…in Westchester, nine state mandates will consume three quarters of our tax levy…75 cents of every property tax dollar…

Youth Detention ($2.9 million), Child Welfare ($7.4 million), Probation ($15.2 million), Indigent Defense ($17 million), Early Intervention ($17.5 million), Preschool Special Education ($42.6 million), Pension Costs ($51 million), Public Assistance ($51.9 million), And Medicaid, the mother of all mandates at ($211 million or 38 percent of the tax levy).

County Executive Astorino did Westchester great service by listing these mandates in the County’s budget and putting a dollar amount on each.   Ask your school district’s school board members and your town’s board members to do the same thing for each of their budgets.   And even if estimating a dollar amount for a regulatory mandate, such as the Triborough Amendment, is difficult, list and describe how each regulatory mandate works, so that voters can see how an implementation cost is shifted from a state budget to a local budget.   And often an exact dollar amount is not necessary to understand the significance of the cost shift.  Otherwise, there is neither transparency nor accountability for the NYS Legislature’s actions.

Mandates are state spending inserted in county, school, and town budgets.

Mandates are Hidden State Spending.  

If voters can’t easily see what the NYS Legislature is doing, there is no transparency and no accountability.   Without effective transparency and  accountability, voters cannot perform their duty as citizens to oversee our elected officials.   And instead of voters exercising informed oversight over elected officials through the voting booth,  elected officials end up in charge of the voters those officials are supposed to be answerable to, i.e. the tail wagging the dog.    That’s the opposite of how our government is designed to function.

Many public meetings begin with the Pledge of Allegiance.   The Pledge includes the phrase,  “…and to the Republic, for which it stands…”   ”Republic, ” not simply ”democracy,”      In our republic, voters give some of our powers to elected representatives to act on voters’ behalf.    Accountability means that if voters approve of their representative’s actions, then they re-elect the representative, and if voters disapprove, then they elect someone else.  Either way, transparency is essential for voters to  know what their representative has done.   Mandate spending hinders transparency, because it is hidden and not readily apparent to votes.

One way mandate spending is hidden was mentioned above.   Mandate spending appears in local budgets where voters don’t expect it (flour in a sugar bowl).

Another way mandate spending is hidden is that the state budget does not list it in total state spending.    So whenever state elected officials speak about their efforts to control  state “spending,” they should mention both the state budget “spending” and the mandated local budget spending to provide the true picture.    They should not claim credit for being fiscally responsible and reducing spending without acknowledging their escalating, local budget mandate spending. Voters who are unfamiliar with the ever-escalating mandate spending in local budgets and who are pointed only toward the state budget will not see the true magnitude of the Legislature’s spending.

Another way that mandate spending is hidden is by dividing and dispersing it among many local budgets throughout the state.   State budgets are complicated enough.   But then add in county, school district, town budgets, and how many voters, or reporters, can reasonably be expected to sort through them all and consolidate them all in order to grasp the overall picture of state spending?   A former Westchester town board member used to hear complaints and comments from voters all the time, when he was still on the town board.  After he was elected to county legislator, the comments dropped off.  Many voters stopped talking to him, because they had no idea what he or the county legislature did, much less how much of the county budget consisted of hidden state spending.

Another way that mandate spending is hidden is that, by dividing and dispersing  it among many local budgets, the total statewide spending for any particular mandate is not readily available.   In the quotation above, County Executive Astorino cited $211 million of Westchester County Medicaid spending, one county’s portion of the statewide Medicaid spending.    But to grasp the overall cost of the Legislature’s Medicaid spending mandate, the Medicaid spending in every county in NYS must be totaled.

If all countywide Medicaid spending were taken back into the state budget so the Legislature had to find money to pay for it, they would work harder to reduce that spending.  Democrat Assemblywoman Paulin and Republican Assemblyman Castelli have  jointly sponsored just such a bill to move all Medicaid spending back to the state budget.   Though the spending would still occur, it would be more transparent, the Legislature’s accountability clearer, and the Legislature would be more motivated to restrain the spending.  Opponents of that bill don’t want to add spending back into a state budget at a time when they wish to convince the public they are limiting and controlling state spending.

Another way mandate spending is hidden is through the public hearing process.  Counties, school districts, and towns have public hearings about their budgets.   County legislators, school board members, and town board members typically sit on stage and listen to voters who appear to address them about the budget.   Though a big chunk of local budgets amounts to a mini-state budget enacted by the NYS Legislature rather than the local officials in attendance, state legislators do not attend local public hearings to take responsibility for their portion of the budget.   The public hearing process hides the Legislature’s responsibility for state spending in local budgets and gives voters the impression that their local officials at the front of the room are responsible for the entire budget.   The process gives the Legislature a Get Out of Public Hearing Free card and hides their responsibility.

Mandates Are Spending Other People’s Money.

Since mandate spending is not contained in the state budget, legislators don’t need state money to pay for mandates.    By inserting mandates in town, county, and school district budgets, Legislators in effect pass policies free of charge to them, as if they are using other people’s money.    It’s human nature to spend more if someone else is paying for it.    Legislators wishing to curry favor with campaign donors can enact a donor’s favorite policy without cost to the state.

Mentioned above was the Paulin/Castelli bill to move county Medicaid spending back to the state budget.  Also mentioned was  County  Executive Astorino’s  explanation that Medicaid was 38% of an entire prior year’s county budget.   Sending that bill back to Albany would improve transparency and accountability, as well as force Albany to take greater responsibility for their own excessive spending, since they would have to find money to pay for it, instead of simply charging it to local property taxpayers.

Mandates Turn Local Budgets Into State Budgets and Property Taxes Into State Taxes.

Because mandate spending has such a dramatic effect on county, school, and town budgets, those budgets should be viewed as a combination of a state budget and a local budget.   Compare a husband and wife who each have their own credit card for the same account.  Their monthly credit card bill routinely shows how much each spends as well as their combined total.       For transparency and accountability, this same approach should be followed for local budgets, instead of an undifferentiated blend.

As County Executive Astorino did in the above quotation, county legislators, school board members, and town board members, should have a website that breaks out, explains, and quantifies for their voters the mandate spending in their particular budget, i.e. the state budget contained in the local budget.

And since property taxes are paying for the state budget portions of county, school, and town budgets, voters should think of property taxes as state taxes imposed by the NYS Legislature, as well as as a local tax.

Mandate spending is not limited by the tax cap.

The property tax cap limits the amount of taxes that can be assessed in a year.   If a local government’s must cut spending to meet the tax cap, note that it cannot cut state mandate spending, because only the NYS Legislature has the legal authority to do that.  So a local government can only cut its own spending to meet the cap.   In passing the tax cap, the Legislature did not tell local officials which specific local expenditures to cut and in what amount.  The tax cap is a so-called “blunt instrument” that limits the bottom line without specific requirements on how to reach that result.

The property tax cap is a NYS spending limit and austerity diet forced upon local government which the NYS Legislature is unwilling to impose on itself.   Why didn’t NYS Legislators take the same medicine they imposed on local elected officials?   By not doing so, they imply that local governments are wasterful overspenders while state government is frugal and fiscally responsible.   Why didn’t they make their mandated spending subject to the same tax cap?   Why didn’t they enact a tax cap for the state budget?   Because a majority of them wish to continue their unchecked mandate spending.

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