A new battle has broken out between the Westchester County Board of Legislators and County Executive Rob Astorino. This time it’s over tax-exempt financing for not-for-profit organizations.
The fight involves the issuance of bonds valued at up to $51 million to finance projects at Northern Westchester Hospital and Rippowam-Cisqua School in Mount Kisco. It’s yet another instance in which the Democrat-controlled Legislature and the Republican county executive have failed to find common ground.
The clash between Astorino and Board of Legislators Chairman Ken Jenkins, D-Yonkers, isn’t about to end. Jenkins is among the Democrats touted as a possible challenger to Astorino when the Mount Pleasant Republican seeks re-election in 2013.
On Monday, Astorino announced he’d decided to sidestep the Legislature by issuing bonds through the Local Development Corporation he’d created earlier this year to facilitate tax-exempt financing for non-profits. The new agency was needed following state action in 2008 that prohibited local Industrial Development Agencies from issuing tax-exempt debt to non-profits.
“We’d made numerous attempts to partner, but then there was foot-dragging, and we decided to move forward,” said Astorino spokesman Phil Oliva. “The county executive wants to work with the legislature, but they’ve been unresponsive.”
But legislators say Astorino was unwilling to collaborate.
“Since County Executive Astorino proposed the formation of an LDC in January, our open and transparent legislative process could have allowed for a reasonable and thoughtful debate on the creation of an LDC that will be responsive to the needs of Westchester’s residents and business owners while also following a prudent financial path that protects our taxpayers,” Board of Legislators Chairman Ken Jenkins, D-Yonkers, said on Friday.
Board spokesman Tom Staudter said legislators were perplexed over the administration’s change-of-heart on legislative approval, which was sought in legislation submitted on Sept. 10.
“How does the administration reconcile this flip-flop?” Staudter said.
Astorino had first sought approval by the county board for the new agency. But talks went poorly. By September, Astorino decided to seek legislative approval. But the legislature “received and filed” the proposal, effectively killing it without referring it to a committee for discussion.That’s the same tactic the board took to kill the administration’s plan to demolish 108 units of affordable housing at the former WestHELP site in Greenburgh so a Yonkers agency could build a campus for the developmentally disabled.
Astorino based his decision to move unilaterally on a legal opinion from the county’s bond counsel, Nixon Peabody, which found no requirement in the state’s not-for-profit corporation law that would require legislative approval.
“Endless foot-dragging is what gives government a bad name,” Astorino said. “When government has the tools to help, it needs to put them to work.”
Legislators, meanwhile, pointed to actions by the county legislatures in Nassau and Suffolk counties, which both approved the creation of Local Development Corporations in their counties, which relied on guidance from the federal Internal Revenue Service. The tax-exemption is for federal taxes.
According to Board Chairman Ken Jenkins, that guidance included the requirement the county’s governing body approve the LDC creation and the corporation’s board of directors is elected by the county’s governing body.
But the attorneys at Peabody Nixon said the county could move forward, Oliva said.
“It’s bond counsel’s job to say if it meets the code,” Oliva said. “The IRS doesn’t issue anything on the matter.”
Oliva said he didn’t know the timetable for selling the tax-exempt bonds on Wall Street. But he said they would be sold.
“The decision has been made to move forward,” he said. “And it’s moving forward.”