Senate Fight Could Bankrupt Yonkers: Mayor

The money is going fast

The political impasse in New York's Senate -- combined with an old financial rule that gives the state oversight of Yonkers' budget -- has brought the city within 10 days of bankruptcy, the mayor said.

Mayor Phil Amicone, while vowing that city government would not shut down, is raising the specter of paying police officers and firefighters with IOUs -- if they agree.

If Yonkers, a city of 200,000 residents just north of New York City, really ran out of cash it likely would be the most serious impact of the 31-31 split that has immobilized the Senate in Albany for a month.

And the money is going fast: On Tuesday, the mayor said he had enough cash for two weeks of operating expenses; on Wednesday, after an overnight storm forced emergency workers to work overtime, he said he was down to 10 days' worth.

Yonkers needs two taxes extended, and the bills that would extend them are not controversial, but the Senate deadlock is holding them hostage.

``The state's inaction is going to cause a city to go bankrupt, and that's a disgrace,'' Amicone said. ``They're going from being the most dysfunctional government in the country to the most embarrassing government in the country.''

Yonkers, the state's fourth-largest city, has reason to be sensitive about its finances. For 14 years, its leaders bristled under the rule of a state Financial Control Board, which was imposed in 1984 when the city had a brush with bankruptcy.

The board voted itself out of existence 11 years ago, satisfied that the city had turned its finances around. Then-Mayor John Spencer called it ``Independence Day.''

But bonds issued during the control-board days required that the state comptroller certify each year's budget. The rule doesn't apply to new bonds, but because some of the bonds issued in the 1980s and '90s were for long terms, many are still being held and the budget requirement still applies, Amicone said.

However, Comptroller Thomas DiNapoli cannot certify this year's $900 million budget without confirming the revenue it includes. And he cannot confirm the revenue because about $13 million of it depends on the passage of the two bills by the Legislature.

The idea that police and fire protection could be affected did not sit well with 77-year-old resident Anne Lazorko, walking near City Hall this week.

``What would we do without the police and the firefighters?'' she asked. ``I think we shouldn't pay the state Senate, that's who we shouldn't pay.''

Janitor Gregory Fitzgerald, however, took the bankruptcy talk calmly.

``They're not going to let this happen,'' the 60-year-old Fitzgerald predicted. ``They'll just play it down to the last minute. It's all planned.''

The $13 million that would be raised by the extension of Yonkers' income and mortgage recording taxes isn't all that important.

But without an approved budget, Yonkers can't send out property tax bills. So the city is rapidly spending down the $14 million surplus left over from the 2008-09 fiscal year, Amicone said.

The Republican mayor said he has spoken to the city's two state senators, Democrats Jeff Klein and Andrea Stewart-Cousins, and urged them to end the stalemate that began with a Republican-led attempt to seize power.

The standoff developed when one of two Democrats who had joined the Republican coalition returned to the Democrats, leaving the chamber in a 31-31 deadlock. The city's Democrats did not switch allegiances.

The two senators both said they hoped the Senate would end the logjam in time to save the city's budget.

``There will be a result that will prevent any catastrophic situation'' in Yonkers, assured Stewart-Cousins.

Both said this week that the two Yonkers-related bills were passed June 30 when Democrats claimed a quorum had been reached because a Republican senator walked through the Senate chamber to get a cup of coffee.

Gov. David Paterson, a Democrat, expressed an unwillingness to sign bills passed under those conditions.

Amicone said he's trying to find out if it's legal to get a loan or an advance from the state to cover the time until the tax bills pass. He also wants to find out what would happen if Yonkers sent out its property tax bills without having an approved budget.

Barring such a solution, ``I would have to go the unions and ask all the city workers to continue to work without a paycheck until these extenders get passed,'' Amicone said. ``It would basically be IOU's.''

A call to Police Benevolent Association President Eddie Armour was not immediately returned.

Property owners will eventually get their tax bills, just not at the usual time, Amicone said. Bills also go out in October and in the spring.

Amicone also the city hopes to end the Financial Control Board's ghostly vestige by refinancing its debt, which would mean buying back the bonds that give the comptroller budget approval rights.

But he said an end to the impasse would resolve things quicker.

``It's a power struggle over who controls the Senate. I understand the political reasons why both sides are digging in their heels,'' the mayor said, ``but you don't dig in your heels and watch the fourth-largest city go bankrupt because of that.''

Copyright AP - Associated Press
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