Scarsdale may be getting a piece of the pie with the Congressional passage of a $1.9 trillion COVID-19 stimulus package this week, which President Joseph Biden signed into law on Thursday. The bill, dubbed the “American Rescue Plan Act,” sets aside $23.8 billion in fiscal relief for New York State, $825 million of which is reserved to help the state’s small cities, towns, and villages.
According to Mayor Marc Samwick, who said he received an email from Senate Majority Leader Charles Schumer’s office on March 8, Scarsdale could potentially receive $1.96 million in federal funding, which would be paid out in two installments. The federal funds come with some restrictions, though, and can’t be used to cover pension funds or used to offset a reduction in taxes. The funds can be used to cover the costs associated with responding to COVID-19 or its negative impacts, to support essential workers, to cover revenue losses caused by the pandemic or to make investments in water, sewer or broadband infrastructure.
“All of this is obviously subject to change,” said Samwick. “… but we do at least have a ballpark of the funds that we may be receiving should this be approved.”
Like most other municipalities in the state, Scarsdale is still suffering from the fiscal impact of the COVID-19 pandemic. The $60.1 million 2021-22 tentative budget revealed last week includes major nonproperty tax revenue shortfalls, especially in parking fees and fines and forfeitures.
The tentative budget, if passed, would raise the tax levy by 3.42% or $182.11 more than last year for residents with an average residential property assessment of $1.5 million.
During a budget work session March 9, Village Manager Steve Pappalardo made a recommendation to lower the estimated justice court revenues by $100,000 to approximately $350,000 due to a concern over where the line items were currently trending.
Catching many of the trustees by surprise, Samwick suggested the village might use some of the federal funds to retroactively raise nonunion employees’ wages by 2%, given that the village staff didn’t receive a raise in the previous budget. He conditioned the raise on whether President Biden signs the measure and the funds provided were close to the targeted amount. The suggestion from the mayor was met with skepticism from some trustees, who wanted more time to understand the impact.
“I just want to register my protest of being given a proposal to give people salary increases without being told the tax impact first. I just feel this isn’t the way to have this conversation,” Trustee Jonathan Lewis said, adding that the message to the community should first be about how the additional federal funding relates to tax relief for residents, not about salary increases.
Lewis said he still thought the projected tax levy increase was too high and believed it could be lowered to within 2%.
Trustee Justin Arest said he felt like “a deer in headlights” with the proposal and that more conversation was needed especially because, in his opinion, the village was underfunding capital projects.
“The idea that we can’t help taxpayers, but the first thing we’re going to do without real process here … is to just make a decision before even making a decision is just a little concerning to me,” said Arest. “I’m certainly not saying I’m against this proposal and I appreciate … all that the staff has done, but I really can’t tell you how I feel about this until I’ve had time to think about it.”
Trustee Randy Whitestone agreed with some of Arest’s and Lewis’ sentiments, and expressed support for further analysis of the idea.
Samwick apologized for springing the suggestion on the board, as the suggestion was a last-minute thought and he had just gotten off the phone with Pappalardo to explain the proposal minutes before the work session began.
Samwick pointed out that the preliminary federal funds wouldn’t cover the village’s $2.4 million revenue shortfall this fiscal year, or any shortfalls in the future.
“The timeline is tight and we spend an inordinate amount of time and we haven’t done things in this quick way, we’ve done them in a thoughtful deliberate way and we do want to continue doing that,” said Samwick. “However, we do have to file our tentative budget on [April 19] and so there’s very little time left to do that.”
According to Treasurer Ann Scaglione, a raise in wages for the village’s non-union staff would mean a $71,400 impact on the current year budget. With the additional $100,000 in lost revenue from justice court fees, the tax levy would increase by 3.83%.
Trustee Lena Crandall expressed support for the proposal, assuming the village would have restored the 2% raise at some point anyway when funds were available.
“The way you conditioned your proposal was that this increase would only be restored once the COVID money was received from the federal government. Therefore, there isn’t an impact on our tax levy,” said Crandall. “There’s going to be a wash because we would be using the money received from the federal government to restore this wage increase.”
Pappalardo said he expected the first payment from the federal stimulus package to come within 60-90 days from when the bill is adopted into law and a second payment would come a year after they receive the first payment.
“In terms of our ability to move out of COVID-19 operations … it’s been my statement all along that this is a three-year process if we manage it correctly,” said Pappalardo.
During the public comment portion of the meeting, Black Birch Lane resident Robert Berg said that although the federal funds couldn’t be used directly for tax relief, the funds were “fungible” and could be used to offset lost revenues and expenses which would free up money to reduce property taxes.
“We really can make a big dent in reducing property taxes if the village board decides to do so,” he said.
The board decided to schedule another budget session on March 15 to further discuss the tax levy impact for the 2021-22 budget.