Transforming Rochester 16 - Housing Is A Right

Alex White & Dave Atias discuss the City's insistance that there is no foreclosure or homelessness problem in Rochester.  We disagree and provide solutions.  The people running this town seem to value rentership over ownership with their "affordable housing" scheme.  That's not the way to get our economy in shape.  The City's website has a place to see what properties are for sale.  Check it out.  Dave also talked about the book, Triumph of the City.

You can listen to the podcast here or click on the link in the right column.

Rochester's Fiscal Future

First the NY Times wrote an article claiming all counties and cities in New York are begging Albany for money as they are facing huge deficits. Then the local D&C implied that Rochester may go bankrupt when discussing Syracuse's financial problems. These could not go unanswered so Mayor Richards spoke to WHEC news and denied that Rochester will go bankrupt in the foreseeable future. Despite the official denial, cities and counties did reiterate their plea for more money from Albany.

This is not surprising as rapidly increasing pension and medical costs and the recently state-imposed property tax cap are putting great strain on most local governments. This combination of rising costs and capped revenue is bound to cause problems eventually. Looking at our community, Rochester is not doing well. Last year we faced a $40 million budget gap and even after help from the state we were still $25 million short. There were some cuts and many people saw their taxes increase as the city raised the assessment of their properties, but the City also assumed sales tax revenue would grow by almost 4% and that the unions would agree to pay some of their medical costs. While sales tax revenue has grown a robust 2.4 % this still left the City almost $2 million short of what was needed and the unions did not give back the more than $3 million the City needed. There is obviously a problem.

With a possible shortfall of $5 million and an expected pension increase of at least $10 million for next year, these are tough times. Fortunately, thanks to the City’s previous mistakes, there is a solution. For years, we have been taxing large properties at far less than the appropriate amount. Many of the buildings like the Merkel Donohue building are for sale for 3 times what they are assessed. Some have recently sold for at least three times their assessed value. What this means is that there are a lot of properties which could be taxed appropriately thus raising funds. The best part is that assessing these properties appropriately would not hurt “job creators” as most of these projects are rental properties like Erie Harbor, Pathfinders Holdings, or Corn Hill Landing. Some of these projects that are described as "job creating" are really just cash cows for the property owners who rent their properties to businesses at market rate. A good example is the Windstream building at the old Midtown Plaza. These deals only inflate profits for the property owner and allow them to unfairly compete for tenants with other smaller landlords.

All told, there are at least $100 million which Rochester could raise from these large properties which have enjoyed substantial tax breaks for years and are paying less than a quarter of their appropriate rate. This does not mean that Rochester should not pursue more state money, nor that we should stop asking for mandate relief, as the problem needs to be attacked from all angles. But there are rich and profitable companies which have enjoyed favorable tax rates for years at the expense of the community. As we have cut hours at libraries, laid off teachers, and cut recreation, many rich people have enjoyed high profits due to low taxes and now would be a good time to end this corporate welfare once and for all.

Tranforming Rochester Podcast - Collegetown Bait And Switch

Alex White and Dave Atias discuss the Collegetown project in the Mt. Hope area of Rochester.  We discuss how the project began and what the residents of the neighborhood were told they were getting in the beginning.  Alex has a theory that Collegetown is not intended to be successful.  But Dave worries that while this will take years to find out the truth, other corporate welfare-funded projects will be imposed on our community.  Let us know what YOU think.

You can listen to the podcast here, click on the link on the right or listen to Rochester Free Radio.

Transforming Rochester 14 - Dealing With Corner Stores

On this episode of Transforming Rochester, Alex White and Dave Atias discuss the City's new method of dealing with "corner stores".  They're using zoning laws to try to drive these stores out of business.  This is illegal, ineffective and racist.  Most of the stores being targeted are run by law-abiding people.  Alex has a way to get rid of the bad businesses.  Dave and Alex also discuss the recent selling of the Sibley Building.  Most people don't realize that the City is not going to see a penny of the money it was sold for.

You can listen to the podcast here, click on the link in the right column or listen on Radio Free Rochester.

Is this the end of the Sibley building saga?

It seems the tragedy of the Sibley Building in Rochester is finally coming to an end or at the very least the start of a new act. At the end of August, Rochwil finally sold the building to Winn Development. If you were not paying attention this was a building that owed Rochester more than $20 million in back taxes and unpaid loans. The building has just been sold for $5 million. This deals gives the city $3.1 million of the total and uses the rest to pay off debts to two unions who also were fleeced by the Wilmorite (owners behind the shell company Rochwil), The rest of the money owed for the building is being kept as a debt for Rochwil which will soon declare bankruptcy and wipe this out.

So now we must hope the next holder of this property will be better than the previous one. Add to this the fact that the City of Rochester announced this sale on a Friday afternoon, the typical day and time governments release news they do not want people to pay attention to. There is obviously something not good about this deal that we do not know about. But let’s focus on what we know.

Under deals already sketched out, Winn Development will pay $75,000 in property taxes or an assessed value of $1.36 million even though they bought the property for $5 million. Of course this building also has a tenant for 4 more years that will pay $3.5 million a year. So the building will be a cash cow for a few years and even then the taxes will be tied to the rents collected. This is the sort of deal that allows owners to ignore property and keep it vacant.

Meanwhile we get little tax value from this property. This seems like a good deal for Winn, but not so much for the taxpayers and residents of Rochester. Of course it is possible Winn Development will surprise me by fixing the building and turning it into a vibrant part of downtown, but I will not hold my breath waiting.

Transforming Rochester Podcast 13 - Schools and The City are Interconnected

With today being the first day of school in the RCSD, Dave Atias and Alex White talkabout schools again.  They show how what happens IN our schools is directly linked to what happens AROUND our schools.  This is causing students and their families to flee to the suburbs or private schools.  We will never have an improved school district without addressing poverty.  This school year also brings free lunch for everyone.  They discuss a way to improve on this that will not just help our children.  And neighborhood schools are also included in the mix.  Leave us your comments.

You can listen to the podcast here, click the link in the right column, or listen to it on Rochester Free Radio.

Those Who Pay No Taxes and What it Means To Us

It seems that whenever someone starts suggesting that the rich need to pay more taxes, someone chimes in to remind us that the rich pay a lot of taxes. They say that the real problem is that 50% of all Americans pay no taxes. Well the unfortunate fact is that this is true . But when you look at these numbers what you really find is that 37% of all Americans are too poor to pay taxes.

For 15% of Americans, either the standard deduction or earned income tax credits are greater than what they owe. A full 22% of Americans get such a large percentage of their total income from Social Security that they do not pay taxes. You may notice that there are still 13% of Americans who do not pay taxes. These are people who are able to "zero out" their income through other deductions for mortgage, interest, charities, etc. Most of these people “earn” a high income and yet they do not pay taxes.

I see two tragedies in this, both of which seem to have escaped notice. First, it is a terrible injustice that in a country of such wealth, 15% of the working people in the country make too little money to pay any taxes at all. It seems obvious that there is a problem in our wage structure that there are people who work for so little money that they must receive public assistance to survive. If they make so little that there needs to be an earned income tax credit then what is really happening is that our government is supplementing the wages of these individuals. This means the companies they work for are really receiving government assistance and helping them keep wages artificially low.

The other travesty is that so many affluent people are not paying any of their share of the costs of having a representative government. In this election season it would be great if candidates other than those in third parties, would talk about these problems. Between taxes, incentives, enforcement, and the minimum wage, there are many ways to get companies to pay living wages so the government can stop having to provide this form of corporate welfare. It would be nice to finally hear a discussion of how best to tackle this problem. Further it would seem productive to examine our tax codes and determine if we really want all of these deductions the wealthy use to avoid taxes. Such a debate is probably asking too much of our “mainstream” candidates, but that does not mean that we the people cannot discuss this amongst ourselves and vote accordingly.