How Do You Cut Unfunded Mandates?

Welcome to Politics Bites, where every afternoon at It's a Free Country, we bring you the unmissable quotes from the morning's political conversations on WNYC. Today on The Brian Lehrer Show, Carol Kellerman, president of the Citizens Budget Commission and a member of Governor Andrew Cuomo's "Mandate Relief Redesign Team," and Peter Baynes, executive director of the New York Conference of Mayors (NYCOM), explained how these rules crunch local budgets.

Earlier this month, Governor Andrew Cuomo promised to cut unfunded mandates in New York state. These mandates manifest as rules and regulations imposed on school districts and local governments, but those bodies eat the cost of adhering to them, not the state government.

These mandates govern benefits for public employees, decision-making processes in schools, and make for a lot of red tape in general. Peter Baynes said that if we don't start cutting immediately, these costs are going to sink municipal budgets, especially as Governor Cuomo pursues a centerpiece of his agenda: capping property tax increases.

As of right now, for cities upstate, two thirds of the property taxes they collect go to two expenses: pension costs and health insurance for public employees. At the rate they're growing...that in conjunction with a two percent property tax cap would mean that in 2014, every single penny of property taxes collected in those cities would just go to pay pension costs and health insurance...If the cap is going to be a vehicle to attempt to have property tax relief, it has to be done in conjunction with or preceded by mandate relief items that we're talking about. The numbers don't add up otherwise, and there will be devastation in communities in terms of the services provided, the employment within municipalities is already way down, it would be decimated even further.

According to Carol Kellerman, the property tax cap makes it necessary to address unfunded mandates, which she likens to a really bad date. But the measure could also push local governments to bargain harder with unions in the face of reduced revenues. 

It's like taking someone out for dinner on someone else's credit card. The legislature imposes a variety of sweeteners in the terms of the pensions and then the localities are expected to cover the costs. That's a very large unfunded mandate. Health insurance is not, it's collectively bargained and I think part of the governor's intent in the property tax cap is to put more pressure on localities to bargain more effectively and get more of a contribution from employees for health insurance.

Among Baynes' recommendations for mandate reform are easing regulations on local governments as employers so that they can negotiate more affordably with unions. Public schools are another huge arena for mandates, which Kellerman said can be as specific and nuanced as defining who sits on a committee that oversees a single student's education.

The state specifies everyone who must be on the team that determines an individualized education plan for a student receiving special services. It says an outside parent must be on this team, a psychologist must be on this team. It should be easier for local school districts to make the determination of what staff they need on these teams.

A caller named Mark said that such mandates were so burdensome—and the state funding received by some districts so negligible—that his school board had proposed foregoing state assistance entirely to avoid dealing with regulations.

I was on a school board in a so-called "high performing" district, and as is true for many of these districts, we receive a very small percentage of our budget from state funds. Ninety-five percent is raised locally, yet mandates from the state are onerous and increasing every year. Our proposal was to eliminate all state funding in its entirety in exchange for mandate relief.

Baynes said that while it may work in wealthier counties, leaving state funds on the table wasn't a viable option for school districts in more depressed regions. Local governments and municipal organizations will be stuck with cumbersome mandates unless the system is gutted and streamlined. Carol Kellerman said that mandate relief could have a point of contact with the governor's call to reorganize public institutions across the state, possibly signaling a sea change in the way government conducts its business in New York.

There's no mandate that there be 700 school districts, for example, and I think the governor would be in favor of consolidation of local governments wherever possible...We have this national tradition of locally directed schools, and people are very reluctant to give that up. But we may be coming to a point where financially it just doesn't make sense to have all these administrative units.