Governor Proposes Mid-Year Cut in AIM Funding

Would Impact 18 Cities with Non-Calendar Fiscal Years

On October 15, Governor Paterson announced a two-year, $5 billion state deficit reduction plan.  As part of his proposal, local assistance payments remaining in the 2009-10 state fiscal year would be reduced by $1.3 billion.  For the 18 non-calendar fiscal year cities, their total AIM funding for SFY 09-10 would be reduced by 8% and withheld from scheduled payments in December and/or March.  In total, this would amount to a $66.7 million cut in AIM funding.  AIM (Aid and Incentives for Municipalities) is unrestricted state aid provided to all of New York’s cities, villages and towns. 

These proposed cuts, if enacted by the Legislature, would be a direct hit on New York's already overburdened property taxpayer, and come at the worst possible time for cities struggling with weakened economies, dwindling tax revenues, and sharply rising expenditures beyond their control (i.e., pension and health insurance costs).  Furthermore, there is a distinct possibility that the Executive Budget proposal, which will be released in January, will include AIM cuts for all cities and villages. Clearly, our state leaders must do what is necessary to get the state’s fiscal house in order.  However, shifting the state’s deficit onto New York’s property taxpayers cannot and should not be part of the solution.