Tax Scheme Places Residents at Risk

The following letter was published in this week’s issue of the Gazette.

To the Editor:
Political activism is an American tradition as old as the founding of our nation. But there is a big difference between personal activism and a municipal corporation engaging in activism which places its residents at risk.

When our Village trustees pass activist resolutions and send letters of protest to Albany or Washington, such action is harmless, albeit ineffectual. When we participate in a “Hey hey, ho ho, [insert cause] has got to go” march, we are getting some exercise and our neighbors are no worse off.

But when our state and local officials encourage residents to break the law to make a political statement, that is not acceptable.

 Image courtesy of www.401kcalculator.org/

Image courtesy of www.401kcalculator.org/

Along with other municipalities in New York, New Jersey, and California, the Village of Croton-on-Hudson is considering pitching a tax avoidance scheme which is both illegal and creates liability for residents and the municipality itself. 

Trustee Murtaugh tells us this is a “workaround” and Trustee Gallelli says that the “devil is in the details.” The devil is not in the details but rather it is in the fraudulent premise. For that reason, it is not a “workaround” but tax evasion.

The Village proposes to set up “charitable” foundations to accept “donations” in the amount of your property taxes. You would then get a receipt and be able to use that for a 95 percent credit against your Croton property tax bill, and you would tell the IRS that your property taxes are charitable contributions.

If this sounds to you like a harebrained scheme that the IRS will not accept, then you have grasped the essence of the Village proposal. 

Even if it were legal, this scheme has no benefit unless you own your home and itemize your federal tax deductions. It would have little to no benefit to someone with an older mortgage because the interest portion of your mortgage payment declines each month. And if you are wealthy and subject to the AMT, this would not be of use to you. There is a specific group of Croton residents who might want to take the risk of this tax avoidance scheme, but even there the benefit would be far outweighed by the risks.

As an example, imagine a married Croton couple in the 22% marginal bracket. They have $30,000 in itemized deductions of which $14,000 is property tax.

The couple would make a “charitable donation” of $14,000 to the foundation established by the Village. They would then be given a piece of paper (the wording of which shall become important) showing the receipt of $14,000. They would take this to the Village and get a credit of $13,300 against their property taxes, and tender a check for the balance of $700. On their federal tax return, they would claim $14,000 as a “charitable contribution.”

For 2018, the couple’s standard deduction is $24,000. By itemizing, the couple would shield an additional $6,000 from tax and thereby save $1,320. But since they paid an additional $700 in taxes, their actual savings is $620.

Most people would not even itemize for such a small savings, because the additional accounting fees and increased risk of audit are not worth it. The Treasury Secretary has already said that claiming property taxes as a “charitable contribution” is not going to fly with the IRS. 

Back in the 1970s thru the 1990s there were tax avoidance schemes which relied on elevation of form over substance. The IRS aggressively pursued taxpayers who participated in such schemes. They even went after the promoters, CPAs, and attorneys involved. After the collapse of Jenkins & Gilchrist most legal and tax professionals became much more wary of tax schemes which did not pass the smell test.

The Village Attorney says that the Village is not going to be in trouble because it is making no representation that the “charitable contribution” is tax deductible, and that the Village will simply give the “donor” a piece of paper stating the amount “donated” to the “charity.”

By setting up a “charitable” foundation and then taking “donations”, the Village is making a representation. And the Village Attorney is being disingenuous about the receipt which the Village will issue to “donors.”

Albany has not yet issued a sample of the receipt. Let us assume that the receipt does indeed only show the amount “donated.” The problem is that Governor Cuomo cannot defy federal law any more than Gov. Wallace or Gov. Faubus. In recent years we have come to believe that state governments can pick and choose which federal law to follow, and the “charitable gifts reserve fund” law passed in Albany is the most recent episode in the political struggle. The IRS is not going to let New York win this round.

The concern regarding liability which neither the Village Attorney nor the Village trustees will discuss is that the IRS can take legal action against the Village (and any officers of the “charitable foundations” set up by the Village) if they issue such a receipt.

There are actually 2 different types of receipts for charitable donations. If you give $500 to a local food bank, you get a piece of paper saying you gave $500. But if you give $500 to the food bank and attend their Annual Dinner, you will get a piece of paper saying that you gave $500 and that you got a meal valued at $125. The meal is called a “quid pro quo” (QPQ) and you can only deduct $375 as a charitable contribution.

IRS rules on QPQ contributions are explicit, they are federal, and they trump (sorry about that pun) whatever Mr. Cuomo or the Village Attorney wants to write on the receipt. The rules apply any time the QPQ is valued at more than $75, so any Croton property tax bill of more than $78.94 is going to fall under the rules involving QPQ donation receipts.

When our state and local officials encourage residents to break the law to make a political statement, that is not acceptable.

There are 2 requirements: first, the charity must tell the donor that tax deductibility is limited to the amount donated in excess of the QPQ and secondly, the charity must give a “good faith estimate” of the value of the QPQ. Contrary to what the Village Attorney and certain members of the Village Board are implying, “caveat emptor” is not permitted under the IRS rules.

The supporting materials on the Croton Board of Trustees website don’t provide any discussion of what the Board is going to determine as the value of the QPQ, but if the Village really is going to claim that there is no QPQ then the ramifications of this need to be fully disclosed to the taxpayers of Croton who are going to be on the hook for any litigation costs.

In our times, even provisions of the Internal Revenue Code are subjective depending on political viewpoint.
 
The argument for those claiming no QPQ is primarily expounded in left-leaning political circles and relies on IRS guidance relating to charitable tax credit programs established by various states. Those charities involved such things as education foundations, nature preservation groups, and domestic violence shelters. Most of the credits were about 25% (one was 50%). But in every single one of those cases, the charity was for a bona fide charitable purpose and the beneficiary of the donation was not the municipal tax coffers.

The only remotely plausible “no QPQ” support in the context of donations to a government entity comes from an October 27, 2010 advice memorandum (201105010, for those Gazette readers who are tax geeks). It is risky for a taxpayer to rely on such an IRS document, particularly where the facts are not sufficiently detailed to indicate congruence with your situation. 

Yet even in this flimsy support for the “no QPQ” position, the IRS discusses “charitable intent” as a key aspect. Do any Croton officials or the Village Attorney seriously believe that someone giving to the proposed Village “charity” has charitable intent? If you can’t make that case without laughing, then it would be foolish to think that the IRS will buy that argument.

The 2010 memorandum concludes by stating that “there may be unusual circumstances in which it would be appropriate to recharacterize a payment of cash or property that was, in form, a charitable contribution as, in substance, a satisfaction of tax liability.”

In 2018, Croton is proposing to accept “charitable contributions” explicitly for the satisfaction of tax liability. That is the sole purpose of the scheme, and the Village states it right there in black and white in both proposed Local Law 5 and also in the Board Resolution.

All of the “no QPQ” arguments rely on pre-2018 court rulings and IRS guidance. Those determinations were issued when SALT and charitable contributions were both fully deductible. Now that the IRS is going to apply the statutory language of the 2018 tax law, guidance given under the old tax law may be irrelevant.

The Village has not discussed what will happen when this scheme implodes. That may be this year, but if it is resolved through taxpayer audits that could take many years. Croton residents will make their “charitable contribution” in 2018 and file their return in 2019, but any audits may not be finished till 2021 or later. So taxpayer litigation against the Village may not even commence till 2022 or later.

It is important to remember that the 5% tax surcharge cannot not be refunded. Due to timing issues, some people may need to pay twice and apply for a refund. But that is questionable, since the “charity” is not going to give a refund and money paid to the municipality and school district as taxes is a bit dicey to refund and would be a direct QPQ. 

It is not clear as to whether the Village insurance policy will even cover acts taken by the “charitable foundations” nor how officers of the foundations will get D&O coverage since the whole purpose of the foundation is to assist people in an illegal tax avoidance scheme.

I am sympathetic to the need for Croton to make a statement opposing the evil GOP tax plan, but enticing Croton residents to commit tax evasion is not the way to make a statement. 

New Yorkers can be justly proud of our rank as #1 for the heaviest state tax burden. Our property taxes are the envy of lesser states: according to the most recent data from Bloomberg, 9 of the top 10 counties are in New York. 

We in Westchester have the honor of having the highest property taxes of any county in the entire nation. Many of us feared losing our #1 ranking during the years of tax freezes, but George Latimer understands the importance of keeping our property taxes the highest in the nation and Westchester residents can now rest assured.

It is entirely proper—one might even say charitable—to give the rest of the country an opportunity to share in some of that honor by means of subsidizing New Yorkers by fully deductible SALT. Unfortunately the Congress does not appreciate our point of view and changed the federal tax law. 

Quite probably in November the political power in Congress will shift and we will once again be able to share our tax burden. In the meantime, we should embrace our record property taxes as a true badge of wokeness.

Village officials may join Mr. Latimer in celebrating our nationally-renowned property tax burden and seek to keep Westchester’s position intact. But Village officials should not promote a tax avoidance scheme in which residents pay a 5% property tax surcharge and incur IRS penalties simply in order to protest the new federal tax code.

Paul Steinberg
Croton-on-Hudson

After this letter was written, the Board on Monday 5/22 pulled the proposed resolution and proposed Local Law from the agenda. The Village Attorney stated that the State will be holding a meeting in White Plains on June 8 to further explain the program. In addition, Trustee Attias has said that she does not support the proposed resolution.

On Wednesday 5/23, the IRS issued Notice 2018-54 stating that it will be issuing specific rules about programs, and stated “The proposed regulations will make clear that the requirements of the Internal Revenue Code, informed by substance-over-form principles, govern the federal income tax treatment” of programs such as the one proposed here in Croton.
 

The School Board Election Fiasco

The following letter was published in this week’s issue of the Gazette.

To the editor:
This week’s Croton-Harmon school board election fiasco raises questions about the competence of an organization which controls a $47 million annual budget but cannot perform basic personnel vetting. To that extent, valid criticism can be made. But some of the discussion and criticism within the Village and on social media is misplaced.

The actions of Jordan Humphrey have drawn welcome public attention to an election customarily ignored by Croton residents. However inadvertently, Mr. Humphrey has sparked discussion—some enlightening, and some nonsensical.

School Board Vote IMG_0962.JPG

The claim that the write-in format means that only a handful of people decided the election is true, but this is no change from what was planned. As of 24 hours before the election, the race was poised to be decided by a single vote: in an uncontested election, every vote cast after the first ballot is superfluous. Even a write-in election with 2 ballots determining the winner is more democratic.

The flurry of online shadow campaigns on Monday night and Tuesday morning was a positive sign. Much like old-style political campaigns, people put forth the name of their choice and most draftees maintained a stoic public silence. Perhaps next year some of those shadow campaigners will consider running and detailing their vision at some point prior to election eve; an uncontested election is no election at all.

Mr. Humphrey deserves some credit. There was an open slot and he—a new arrival to Croton—was the only person willing to step forward. The position is a demanding one focused on nuts-and-bolts local issues.

School board positions are inherently local, and therefore lack the glamour of some other Village elected offices which can serve (and unfortunately, now do serve) as a soapbox for those who want to #Resist. If you have ever watched a school board meeting online, you probably fell asleep long before it concluded. Serving on the school board is a lot of work, with no pay and little recognition by our community: how many readers can name even one school board member?

The Croton-Harmon school board oversees spending which is more than twice the Village budget. The quality of our public school system has a huge impact on our local quality of life and Croton’s property values. Serving as a school board trustee is a job which is thankless but vital, and it deserves better than being treated as a farce.

Personally I doubt that someone who has just moved in to a school district is the best candidate for a position overseeing and guiding the activities of the school system. But at least Mr. Humphrey was willing to serve, and hopefully the spotlight placed on this office will inspire other people to consider service in future years.

Paul Steinberg
Croton-on-Hudson

Help Stop Robocalls

The following letter was published in this week’s issue of the Gazette.

To the Editor:
We all get robocalls, and our seniors have been especially targeted by scammers. Although many people reported the calls to the Federal Trade Commission database, most of us did not. Even when the numbers were reported, little was done and the scammers just spoofed a different number. Putting your number on the Do Not Call list made no difference since scammers ignore the list.

But there is hope. This year has seen major changes including cooperation between the government and industry. There is now real-time data transmitted from the FTC to telecom providers, and so today it makes a difference if you report robocalls.

robocalls.png

The major phone carriers are using the complaint database to not only block scammers, but also to improve their robocall detection algorithms.

Another problem is that caller ID has become useless since the scammers spoof the phone number they are using; this is why calls from overseas come up on your screen as a 914 number. The Federal Communications Commission is testing an anti-scammer technology solution (named Shaken & Stir, in a nod to James Bond), which would result in ensuring that the number that displays on your call ID is the real number.

As a result of a government competition a few years back awarding a cash prize for the company which came up with a robocall blocking solution, one of the competition winners called NoMoRobo is offering a robocall blocking program (free for VoIP, $1.99/mo for cellphones).

The new rules adopted by the FCC last November allow telecom carriers to proactively block numbers used to originate robocalls. The initial results this year have been positive, but seniors should be aware that many doctor’s offices and pharmacies use robocalls to remind patients about appointments and prescription refills. There have been instances where such calls are blocked by the new anti-robocall technology, and the FCC is working with telecom carriers to fix that problem.

The new efforts are making a positive impact in reducing robocalls and blocking scammers targeting seniors. So if you get a robocall, it now makes sense to take action. And if you know of a senior who is getting such calls, let them know to call 877-FTC-HELP or visit the FTC.gov site.

The number of robocall victims continues to rise, as does the amount lost to scams. Seniors are particularly vulnerable due to several factors. Surprisingly, the fastest-growing group of victims is the 35-54 age bracket; that group has a lot of personal information available on the internet which can be used to increase the likelihood of a scammer being successful.

By taking action ourselves, and by helping our elderly relatives and neighbors to report robocalls, we can make a difference and prevent people in our community from becoming victims.

Paul Steinberg
Croton-on-Hudson

Positive Forces in Croton

The following letter was published in this week’s issue of the Gazette.

To the editor:
Paul Rolnick says (The Gazette, week of April 26-May 2) that he is sick of “rants” and that “many residents . . . wish Mr. Gingold and others would spare us from more of the same in our local paper.” 

My guess is that Mr. Rolnick’s definition of “rants” that should not appear in the Gazette is different from my definition, but in any event I think the result of Mr. Gingold’s letter illustrates why our both our local paper and Mr. Gingold are positive forces in Croton. 

I don’t agree with Mr. Gingold’s reasoning nor his conclusion about the Silver Lake fee. At the risk of shocking Mr. Rolnick, not only do I wholeheartedly agree with the decision of the Board of Trustees on this matter but I also thank Ms. Gallelli for providing a reply which suggests a path forward beneficial to our financially-stressed seniors.

Silver Lake CO P1000780.jpg

Although Mr. Gingold is partially wrong on the merits, he is also partially correct. His letter provided a valuable public service quite apart from bringing the Board of Trustees policy change to the attention of readers of this newspaper.

Mr. Gingold was upset (see his letter here) that the fee waiver for seniors had been eliminated. He stated that he discovered this when he went to the Municipal Building to get his 2018 pass. Mr. Gingold’s letter made two arguments for the fee waiver.

Mr. Gingold’s first argument was that a fee waiver is warranted “in recognition of our status and in compensation for the substantial contributions we have made to the village during our younger years (and continue to make).”

I disagree with Mr. Gingold on this point. Simply attaining a specific age does not confer any superior social status. For example, we respect the wisdom of our elders, but that has nothing to do with age per se but rather because they bring a wealth of life experience and knowledge which warrants their opinions and advice being taken seriously.  

And if the basis of a municipal fee waiver is “substantial contributions” made by a waiver applicant, then this has nothing to do with age but rather would require an evaluation of what each resident has contributed to Croton. As such, a blanket waiver on seniors would be both over and under-inclusive with the only solution an impractical and cumbersome one.

The second argument made by Mr. Gingold is that many seniors have financial constraints greater than the general Croton population. This is a legitimate concern that should be taken seriously.

I have said for years that the Village policy was too restrictive on ID card issuance and also that it was unduly burdensome on lower-income residents and particularly families. Last year there was a policy change loosening the proof requirements for getting an ID card and an expansion of hours to accommodate parents who work during the daytime. That was a welcome change.

But it did not address my other concern as to the exclusionary impact of Village policies on lower-income residents of our community. It is here that Mr. Gingold’s letter had a positive impact.

In response to Mr. Gingold’s letter, trustee Ann Gallelli replied (The Gazette, week of April 26-May 2) with a letter making two points. At the risk of once more shocking Mr. Rolnick, I think that Ms. Gallelli was correct on both of her points. Ms. Gallelli’s first point was that this modest fee is to partially offset the cost of improvements which will benefit a narrow group of people and that the Village is undertaking these improvements at the specific request of the group of people now being asked to bear a $1 fee.

I often disagree with Ms. Gallelli on Village budget matters, but I don’t see how anyone could disagree with her on her position on asking that Silver Lake patrons make at least a token contribution for these particular upgrades. 

While I find Croton Point Avenue to be a boondoggle and Gouveia to be an eternal money pit, the distinction Ms. Gallelli makes with the Silver Lake fees is a valid and important one. I disagree with Ms. Gallelli on CPA and Gouveia, but those projects are ones which are arguably intended to benefit the municipal populace as a whole. That is not the case with these specific Silver Lake improvements.

Mr. Rolnick and Mr. Gingold disagree on substance but both feel that the Silver Lake fee is part of a larger debate. If you accept as reasonable Ms. Gallelli’s explanation (which I do), then this is an entirely sensible and non-political action and not part of any larger issue.

Ms. Gallelli’s second point is actually the most important data which has come out of this whole exchange, and if not for Mr. Gingold’s letter it would not have come to light.

Ms. Gallelli tells us that Croton “has a financial aid program to ensure that all residents have full access to village parks and programs regardless of their financial situations. Applications are available in the Recreation Office through June 1.”

This not only goes to the heart of objections raised by many residents (not just Mr. Gingold) regarding Silver Lake, this is a program which benefits financially-stressed families who wish to be a part of all of the municipal activities in our community—not just Silver Lake.

I would urge Ms. Gallelli to speak with the Village Manager about ensuring that affected residents are aware of this program. This can be done by putting a notice on Recreation & Parks application forms that require fee payment. Something along the lines of “If you are experiencing financial hardship, fee waivers are available. Contact 271-xxxx” would let people know that they shouldn’t just throw away the flyer before the kids see it and the parents don’t want to tell their kids the family can’t afford to let them attend a Village event.

Another avenue for outreach is the Croton Seniors who meet at the Muni Building: remind them to spread the word to fellow seniors who are in need. Many of our churches have programs assisting our low-income neighbors, and also assist residents who may customarily consume information in Spanish or other languages and therefore not know about the Village fee waiver policy. Organizations such as Croton Caring Committee and the Lions already work with some of our neighbors who will be glad to find out that the Village wants them involved in our recreation programs.

I also think that fee waivers should be accepted by Recreation & Parks at any time that someone has need to apply, not just during a limited time window. At least this should be tested for a year, particularly since the 2018 deadline is just a few days away.

This past month has been a bit of a bummer for anyone who relies on Croton social media to shape their perception of Croton or get news about Croton. That is a discussion for another time. The Gazette has been a refreshing counterpoint to online negativity.

I thank Mr. Gingold and Ms. Gallelli for putting their views forward in the pages of this newspaper. I often disagree with both of them, but I pay attention to their views and find their writing to be well-reasoned. At the end of the day, their dialogue on Silver Lake has been enlightening and beneficial for our community and they have provided a path forward for the rest of us in Croton.

Paul Steinberg
Croton-on-Hudson

Croton Needs to Prepare for Marijuana Legalization

The following letter was published in this week’s issue of the Gazette.

To the Editor:
Last year, many members of our community were upset over the opening of a vape shop in Croton. Marijuana retail stores in Croton are not likely to be as controversial as e-cigarette merchants, but the pending legalization of marijuana in Croton is coming at a rapid pace and some legislation and education outreach needs to be done now.

It is time for us to have a conversation and make some decisions about Village laws and policy.

Last week, Senator Schumer not only announced his support for legalization, he autographed a reporter’s personal bong brought to Schumer’s Senate office and said he would sponsor legislation to give federal money for the promotion of marijuana sales as a means of reparations, saying that it is time to “inject real dollars into minority and women-owned businesses to insure those disproportionately affected by marijuana criminalization can benefit from the new economy.”

 Senator Schumer signing a bong.

Senator Schumer signing a bong.

I personally don’t think that marijuana sellers need government handouts to prosper, but the fact that this is being proposed by the senior elected official of the national Democratic Party indicates how quickly the pot industry is becoming a major political lobby.

In an interview with Vice News broadcast on HBO, Minority Leader Schumer acknowledged that the current Republican majority in the U.S. Senate would block his program. But with the latest national polls giving the Democrats a strong chance of regaining the Senate, Mr. Schumer is a strong candidate for Majority Leader. We may be looking at traveling all the way across the spectrum from federal criminalization to federal government subsidy of marijuana by the end of 2019.

Locally, legalization is even closer. With the defeat of Republicans in New Jersey, incoming Governor Phil Murphy told the Legislature that he wanted to see legalized pot in Jersey by the end of 2018 and he is using a working projection of $60 million in state marijuana tax revenue as part of his upcoming budget.
Regardless of your personal position on marijuana, legalization is inevitable if only because of the huge amounts of money involved. Last week, banking behemoth TD Bank approved their Canada-based investment counselors recommending three marijuana companies listed on the Toronto Stock Exchange, and USA Today said that marijuana sales in California alone will be $3.8 billion this year.

New York has been a rare outpost of Democrat opposition to pot. Governor Cuomo has been opposed because he is concerned with the social consequences and possible “gateway drug” issues.

But with our state Assembly being pro-legalization, and with both Senators Schumer and Gillibrand and primary opponent Cynthia Nixon coming out in favor of pot, Mr. Cuomo has become isolated on this issue. While Mr. Cuomo’s reelection remains probable, the N.Y. Senate is likely to flip to Democrat control; hence the Governor’s face-saving decision to set up a “task force” to “study” the issue.

While most Croton residents are likely to agree with the pot-legalization advocacy of our Democratic Party elected officials and support the opening of marijuana stores in Croton, there is still a question of Village zoning and the degree of law enforcement monitoring of the stores.

During a recent stay in Denver, I was surprised at the social impact of pot. The public buses reeked of marijuana. On a bus ride back to our hotel from the Denver Zoo, there was a disturbance when one obviously high passenger missed the stop for the “dispensary” and demanded the bus driver pull over to let him out. 

A Colorado tourist official told me that “they came for the pot and stayed for the heroin” and she added that there was concern about the sense of decline and lawlessness in downtown Denver having an effect on tourism. A resident in suburban Highlands Ranch told me that she and her husband don’t go downtown anymore because of the conditions since legalization.

Croton is not Denver, and the impact here is likely to be much less. But one Denver lesson may be applicable to Croton, and that is the ramifications of product mix sold in marijuana retail stores.

Aging hippies in Croton can look back fondly on the days when they would toke a doobie during the Summer of Love. But millennials and teens in 2018 Denver have made “edibles” a majority of sales at some “dispensaries.” In addition, concentration of THC in marijuana products is much greater than it was back in olden times. Overdoses are not a great concern with adults (passage of time will usually cure any symptoms), but children are a different matter.

Children’s Hospital Colorado reports a small but disturbing surge in infants and pre-teens ingesting “edibles” and being treated for respiratory problems, including intubation of a 3 year-old, “continuous positive pressure for respiratory insufficiency” for an 8 month-old infant, and the death of an 11 month-old. Cause of death in the 11 month-old is disputed, but the doctors state that the infant arrived at the ER in an unresponsive state with rapid heartbeat, and a urine drug screen came back positive for high levels of THC. 

Although mainstream media and an increasing number of national politicians dismiss the Denver experience as an anomaly, Colorado Gov. Hickenlooper (D) signed the “Gummy Bear” law banning edibles in the shape of animals and fruits. If New York State does not enact such limitations, then the Village of Croton should consider passage of a local law.

In a family town such as Croton, the Colorado experience with “edibles” should be a cause for concern among our parents and teachers. In addition to immediate physiological impacts on infants, there are concerns both due to the effects of THC on teenage brain development, and also due to the use of pot by teens to self-medicate; thereby masking underlying emotional issues that would normally be spotted by parents and teachers.

Our Croton school district leadership needs to decide how to educate students about pot. Many of their students are going to be coming from homes where parents will smoke pot and consume “edibles.” It is going to be difficult if not impossible for schools to convince students that consumption of marijuana is harmful when the students see pot used in their own home or when they visit the homes of classmates.

The DARE curriculum (Drug Abuse Resistance Education, a national drug prevention program used in Croton schools) advises against initiation of marijuana discussion below around sixth grade: “Most students in this age group have no basis of reference to the substance. Research has found that teaching children about drugs with which they have no orientation or real life awareness may negatively stimulate their interest or curiosity about the substance.”

DARE focuses on alcohol and tobacco: “the two most common and dangerous drugs with which elementary aged students have knowledge or familiarities are alcohol and tobacco. Also, these are the substances, across all segments of the population, with the highest use levels within this age group.”

DARE’s curriculum at the high school level stresses resistance to peer pressure, providing data to show that it is socially acceptable to decide not to ingest drugs. Unfortunately, while it is true that consumption of alcohol or tobacco is not actively promoted by parents or politicians, this is no longer the case about marijuana.

No politician would sign a carton of cigarettes or case of beer, but in this state our politicians will autograph a bong. New York politicians are openly enthusiastic about pot, and—in the case of Mr. Schumer—even want to put tax money toward promoting marijuana businesses.

But there are longitudinal studies suggesting impairment of verbal cognitive functions in children, with a direct relationship between age of first use and impact. A New Zealand study concluded that even when high-consuming pot-smoking teens stopped as adults, there was permanent reduction in IQ test scores. 

For obvious reasons, there has not been much research on human in utero exposure; but animal studies show cognitive impairment in adult rats, likely due to effects of THC on development of the hippocampus (the brain area involved in memory formation).

Most studies on the effects of THC on brain development have been performed on lab rats. In New York, we are about to embark on a massive experiment with our children as lab rats.

My personal libertarian perspective would normally lead me to join Sen. Schumer, Sen. Gillibrand, Ms. Nixon, and other New York politicians in welcoming state-wide consumption of marijuana in all its glorious variants. And I realize that marijuana criminalization no longer has voter support, either nationally or locally. But after observing Denver and speaking with people living there, I am concerned about the impact of the coming legalization here in Croton.

At very least, the Village and the school district should start involving residents and parents in preparing for the coming legalization of marijuana and we should consider whether to pass new zoning laws now, rather than waiting till after the fact.

Paul Steinberg
Croton-on-Hudson
 

Seniors of Croton, Unite!

The following letter was published in this week’s issue of the Gazette.

To the Editor:
Seniors of Croton, unite! The village board is coming after us with guns blazing.

The other day my wife and I went to the Municipal Building to renew our Rec passes, which expire next month. After our new cards were issued came the shock—and the outrage!

For years, no, for decades, Croton seniors have been issued free passes for Silver Lake. This in recognition of our status and in compensation for the substantial contributions we have made (and continue to make) to the village during our younger years. But when we requested our Silver Lake stickers for this season, we were rebuffed. It seems the board, in its infinite wisdom, has chosen to reverse this venerable policy and, henceforth, seniors will be charged a fee for entry into our favorite swimming hole.

Silver Lake CO.jpg

Yes, the fees are moderate. And yes, many of us can reasonably afford them. But there are also those in our village, many on fixed incomes, who struggle every day to remain in their homes in our high-priced community; and for whom every dollar is important if they are not to be driven from our midst. And how much can the board possibly expect to reap from these folks in comparison to our $19.5 million budget? A pittance at best.

So what is behind this slap in the faces of our oldest residents? Is the board that desperate to glean every nickel from every source to fund its pet projects like Croton Point Avenue and Gouveia Park? Is this how they respond to the Financial Stability Committee’s warning that village expenses will soon exceed its revenues?

It is sad to contemplate that, during a hot, muggy day this August, some of our senior citizens may be forced to forgo the opportunity to cool themselves in the waters of the Croton River, or to just sit in the sun and reminisce with old friends about the good old days when our village board actually cared about all of the residents of Croton, not just themselves and their friends.

Sincerely,
Joel E. Gingold

Vandalism Should Be a Wakeup Call

The following letter was published in this week’s issue of the Gazette.

To the editor:
The smashing of a vehicle window in Croton is disturbing (The Gazette, week of April 5-11), and that the victim is a hardworking immigrant who actively supports our community makes this an embarrassment for Croton as well.

Occurring in broad daylight just steps from a daycare center, the timing and place of this vandalism should be a wakeup call. When people feel they can do this with impunity, it creates an environment which is damaging to public safety and to property values in our Village. 

 Photo courtesy of Wikimedia Commons.

Photo courtesy of Wikimedia Commons.

I hope that somebody comes forward with information to apprehend the vandal. The vandalism comes in the context of other developments. The Upper Village has gotten a shabby look in recent months. In addition to the ugly vacant storefront at the former Three Dog Bite, exterior storefronts have become billboards for advertising flyers. The row from the Chinese restaurant down to the former German deli now sports a variety of flyers, which remain even after they have been exposed to wind and rain.

A word of thanks is due to ASAP Mortgage, which has always kept an attractive storefront since it opened last year. If every business owner and landlord followed their example, the Upper Village would be a better place.

Not only does the Village refrain from doing anything about the growing eyesore, our Village has chosen to add to the visual blight by putting up “Solarize Croton” flyers alongside the other advertisements. Solar energy is a wonderful cause to promote, but I don’t think the Village needs to litter in order to do so.

I do give credit to the Village for last week’s clean-up of the municipal land along Old Post Road opposite the Municipal Building. It had come to the point that the Bud Light cans and potato chip wrappers had been joined by a single white ankle sock which laid in the middle of the sidewalk. Perhaps it is time to consider a small trash can. Yes, people should take their trash away. But they are not doing so, and since this is part of the Village trail system a bit of pragmatic action by the Village is not unreasonable.

The Village of Croton gives a lot of thought to problems such as the proper level of federal funding for the National Railroad Passenger Corporation and where Comptroller DiNapoli should invest the state pension fund. And no doubt the leadership in Washington and Albany eagerly awaits the latest pearls of wisdom from Croton.

Compared to weighty matters of state, a smashed car window or visual pollution are unworthy of great minds who “think globally.” Indeed, in the current environment it is downright reactionary to suggest that the Municipal Building focus on such pedestrian concerns.

But unlike events in Washington or Albany, the Village can have an immediate positive impact on the conditions in the Upper Village. Moreover, if we don’t think locally and act locally nobody in Washington is going to do it for us. There are specific steps which can be taken.

First is to reach out to the landlords of the retail properties. If they have allowed the posting of these flyers, then they should be encouraged to rethink that permission or at very least to have the flyers posted on the inside of the window. If they have not given permission then the Village should consider implementing and enforcing appropriate code provisions.

In addition, the Village should encourage owners of vacant storefronts to maintain the property in a manner which takes into account the impact of aesthetic factors. The value of the landlord’s property is tied to the desire of entrepreneurs to rent, and who wants to open a store on a blighted street?

The local business community also has a stake in having an attractive and safe Upper Village. Working with the Chamber and the Rotary, the Village can leverage the knowledge and enthusiasm of people whose focus is on retail sales development.

Croton’s arts community is another resource: some communities such as East Hampton and Riverhead have worked on bringing together artists and landlords to utilize the vacant frontage as an artistic forum.

Croton should also seek advice from other municipalities. I don’t agree with all of Beacon’s requirements, but at least Beacon’s leadership has given this matter some thought. Larchmont and Bronxville struggle with retail vacancies but you don’t see tacky flyers taped on the outside of store windows or trashed interiors. In both of those communities, there is an explicit commitment to prevent retail blight. In Bronxville, the Mayor’s “shop local” campaign reminds residents that the sales tax revenues keep property taxes down. In Larchmont, the Mayor says that retail vibrancy “is our top priority as the village board.”

I realize that local issues are not the top priority of our village board. But we have some sharp Village employees, and perhaps they could deal with the current state of the Upper Village while our elected officials are busy saving the planet.

All of us as Croton residents can do our part by making an effort to shop local, and support our Croton businesses. Retail is changing permanently, and unless we want decaying streetscapes we need to welcome businesses who are willing to contribute to our economy. In the last 2 years, Croton has seen a number of foodservice and beauty establishments open. Unfortunately some residents went on social media to complain about having too many delis and nail salons.

This negative attitude is short-sighted and based on the idea that Croton can turn back time. When prospective tenants read negative and hostile comments on Facebook “community” pages, they look elsewhere. We don’t have the population density to bring back artisanal toy stores or bookstores, and that is a reality we need to accept in the online era.

Smashed car windows and vacant storefronts are not a good image for Croton. We need to spend some time thinking locally and acting locally.

Paul Steinberg
Croton-on-Hudson

Hypocrisy from Our Democratic Village Board

The following letter was published in this week’s issue of the Gazette.

To the editor:
We are used to hypocrisy from our federal and state politicians, but Washington and Albany have nothing on our own Democratic Village Board. 

During last fall’s campaign, candidates Pugh, Horowitz, and Attias manufactured a huge issue over the Croton United Board’s one-year deferral of the purchase of a replacement for aging fire truck 118. 

OMG, they cried! The existing apparatus is disintegrating before our very eyes! This is a really, really serious public safety concern!! Our very lives will be in danger until the new truck arrives!!! We’re doomed!!!! We’re all going to die!!!!! Somebody save us!!!!!! Please!!!!!!! Quickly!!!!!!!!

CHFD Engine 118.jpg

In the 2017-2018 budget adopted by the CU Board, the replacement was to be purchased in the 2018-2019 fiscal year at a cost of $700K. So, due to the extreme urgency of the situation, you would have expected that the very, very first thing the new Dem Board would do was to place an order for the new fire apparatus to save us all from certain extinction.

But is that what happened? Of course not. The first major expenditure made by the Dem Board was to purchase a $250K study and design for the ill-advised Croton Point Avenue Project. Clearly, in their opinion—and they certainly know better than anyone else in the village—the CPA project is far, far more vital than replacing the fire truck they previously insisted would completely collapse as flames were shooting out of our windows and doors. In the Dems budget, the replacement has been deferred yet another year, to F.Y. 2019-2020. And the cost has ballooned to $875K. An additional $1.5 million will be borrowed to be ultimately squandered on Croton Point Avenue.

There are only two possible explanations for this. Either Mr. Pugh, Ms. Horowitz, and Ms. Attias knew that the existing fire engine, while old, was still serviceable and would clearly be reliable for another few years, in which case they were totally disingenuous, and, as is the Dems way, were willing to say anything to get elected. Or, the truck has actually reached the end of its useful life and is no longer reliable, and we really are all in jeopardy, but they just don’t care about that.

Those borrowings next year will blast right through the debt guidelines recommended by the Financial Sustainability Committee and adopted by the prior Croton United board. Further, the FSC, having identified serious financial problems looming in the future, recommended last fall that all future budgets include 5-year forecasts of revenues, expenditures, debt service, and capital expenditures, so that these problems can be identified early and addressed before they do real damage to the village’s fiscal health. However, the Dems’ budget addresses only a single year, except for the capital projection that, as has been the practice for decades, extends for several years into the future.

It must be that, in addition to knowing what’s best for everyone else, the Board also believes that it is far better qualified than the financial professionals who make up the FSC to ensure Croton’s fiscal health. Although, to my knowledge, not one of them has any expertise whatsoever in finance.

This financial wisdom extends to the $44K they propose to spend on cosmetic repairs to the Gouveia house, when, according to the Dems’ financial analysis used to justify the acceptance of the Gouveia property, the total cost of renovation and bringing the house up to ADA standards was just $110K. That’s a lotta work to be done with the remaining $65K. But they obviously must know something that escapes the rest of us.

I don’t pretend to be a fiscal expert. But I do know enough to follow the advice of those who are, whether in my business or personal life. Concern that the Board has no use for the FSC and just wants it to go away, continues to grow. Then they can merrily spend unlimited sums of taxpayers’ money on all of their pet projects without fear of contradiction. 

Unless and until, someone finally stands up and says “ENOUGH!”

Sincerely,
Joel E. Gingold

  • For more on the Croton Point Avenue project see here.

Support the Marrakesh Treaty

The following letter was published in this week’s issue of the Gazette.

To the editor:
Senator Schumer and Senator Gillibrand’s support is vital to passage of a bill which will expand opportunity for visually-impaired people here in Croton and worldwide. Passage of S.2559 will enable our libraries in Croton and Ossining to give the visually-impaired members of our community access to the same resources most of us currently take for granted.

 Helen Keller

Helen Keller

Senate Bill 2559 is the next step in our nation implementing the Marrakesh Treaty, providing a limited copyright exemption for libraries to make information available to people with disabilities.

Locally, the Marrakesh Treaty will benefit visually-impaired people here in Croton and the surrounding community. In particular, the American Library Association notes that Spanish-speakers in the United States will benefit from increased ability to access native Spanish content from around the world. 

In developing countries, less than 1% of print content is accessible. We live in the information age, and excluding people from access to information means excluding them from participation in our society. By allowing import and export of existing accessible resources, we will avoid wasting money on duplicative transcription efforts and increase the amount of information available worldwide.

For more than a decade, advocates for the disabled have worked alongside academics, librarians, and diplomats to get to where we are now. The bill is currently in the Judiciary Committee.

Please call Sen. Schumer at (914) 734-1532 and Sen. Gillibrand at (845) 875-4585 and ask them to co-sponsor S.2559.

Paul Steinberg
Croton-on-Hudson
 

More on Ethical Practices in Croton's Government

This letter was published in the Gazette on March 1, 2018. See the previous letter on this topic here.

jcope_seal.jpg

To the Editor:
The subject of Ms. Gallelli being paid for writing the Village newsletter has been a controversial matter in Croton for many years, and has been a matter of public discussion for more than 10 years.

My letter was in response to the narrow issue of a recent Village Board resolution and subsequent discussion in the Gazette, but since Mr. Masur (The Gazette, week of Feb 22/28) wishes to discuss the 14 year backstory I will address Mr. Masur’s points at this time. 

Mr. Masur is correct that Ms. Gallelli was the sole author of the newsletter for 14 years, and that this continued across the tenures of three Village Managers. But as I stated in my original letter (The Gazette, week of February 8/14—see below) this does not mean that the practice was compliant with Village Code nor that the practice should continue.

Mr. Masur says that “the Village owes Ms. Gallelli our respect and gratitude.” The taxpayers of Croton expressed that “gratitude” in the form of a check. At roughly $4,000 per year for 14 years (plus $3,000 per annum for the years as an elected official), I would say that Ms. Gallelli should not be complaining about a lack of taxpayer “gratitude.” If Ms. Gallelli feels that she is not given sufficient honor and acclaim for her efforts by the residents of Croton, then she should reconsider why she is a politician.

Mr. Masur complains about “continued libelous attacks on her character for political leverage.” 

If Mr. Masur or Ms. Gallelli feel that mere discussion of a municipal official’s compensation is “libelous” they might want to consider that Ms. Gallelli is—at least by titled position—a public servant. Failing that, Mr. Masur and Ms. Gallelli have their recourse and I urge them to pursue it in the appropriate judicial venue. Since the days of John Peter Zenger, New York politicians have tried to intimidate the citizens and the media. I am grateful for this newspaper and the online outlets which give the residents of Croton a forum for speech.

A few months ago there was an article in this newspaper, and a subsequent letter from Amy Ferrara. I disagreed with the article and the letter, and wrote in response to that. Such action is hardly continuous nor is it for “political leverage.”

In fact one of the earliest public criticisms of the payments to Ms. Gallelli were from a loyal member of Mr. Masur’s own (Democrat) organization. Those comments were prompted by a comment at the Village Board meeting of June 18, 2007 by a (Republican) resident suggesting that Ms. Gallelli include a particular item in her next Village newsletter. This prompted an inquiry by a (Democrat) resident who uncovered the details of payments which had been going on for 5 years at that point. 

For many residents, the first time they heard of the payments to Ms. Gallelli was on July 2, 2007 when the blog authored by the (Democrat) resident posted a tart comment wondering whether there had been any competitive bidding process and whether there were other “sweetheart” deals undisclosed to the public.

By 2010, the Village briefly attempted to go “green” with online publication commencing with the June issue: the Village would only print a limited run for distribution at the Library and Municipal Building. Estimated printing and postage savings were $12,000 per year. This is an often overlooked aspect of the newsletter: the environmental damage and distribution costs of hard-copy media. At the time, this change was viewed favorably by the same local (Democrat) blogger who authored the 2007 criticism of Ms. Gallelli’s compensation.

When a payment practice is a matter of public controversy for more than a decade and is condemned by Croton taxpayers of all political stripes, the time for change is long past-due. That is what was finally done on November 20, 2017 with passage of the Board of Trustees resolution by a vote of 4-1. 

Mr. Masur makes much of the period from 2002 through 2006, and his observation does highlight the narrow scope of the 2017 Board resolution. I would have liked to see a broader scope, but the resolution does prevent recurrence of the 2006 through 2016 situation and that is better than doing nothing. 

One key point which was never addressed by either Mr. Masur or Ms. Gallelli is the applicability of Village Code chapter 54. This omission is as understandable as it is telling: even after 14 years the classification(s) of those tens of thousands of dollars in payments remains unclear. Apart from possible violation of Village Code, classification of both pecuniary benefit and hours expended would affect the treatment of Ms. Gallelli under the NYSLRS pension formula. 

Mr. Masur says that there could never be any political spin to the newsletter because each issue was reviewed by the Village Manager. This implies that for those 14 years Ms. Gallelli either acted as an independent contractor or as a Village non-elected employee (in addition to being a paid elected official for 10 of those years).

Mr. Masur’s letter is to my knowledge the first time that anyone has claimed that for 14 years the Village Manager reviewed each newsletter prior to publication. Even if Mr. Masur is correct in his implication, most of us in Croton are aware that the Village Manager serves at the pleasure of the Board. More to the point, the Village Manager is aware of that fact. 

At one point, a village resident (a registered Democrat) asked Ms. Gallelli whether the “Got a Question?” feature of the Newsletter was based on actual resident questions. After a cagy response from Ms. Gallelli, the resident FOILed and the official response of the Village FOIL officer was that there was nothing responsive to the FOIL request—in other words, Ms. Gallelli was astroturfing: no actual questions had been submitted to the Village for answer in the newsletter.

In November 2015 every household in the Village received the newsletter with an above-the-fold “Got a Question?” segment discussing how “many residents” were still “understandably unhappy” with Verizon for a decision made 5 years previously.

But since cessation of FiOS expansion had been announced in 2010, why after 5 years was it suddenly so important to make sure that municipal tax money and resources were used to denounce a specific company 4 days before a Village election?

In fact, has the Village of Croton-on-Hudson ever before or since sent a Village-wide mailing to denounce a specific company?

For those who did not live in Croton at the time, I would point out that the arrival of the newsletter occurred 4 days before Election Day, and one of the challengers was a well-liked Croton resident who is a Verizon executive. At the time, Verizon had 178,000 employees and the Croton resident had nothing to do with the FiOS rollout.

No doubt Mr. Masur and Ms. Gallelli would claim that it was simply coincidence, and perhaps it was all just due to Ms. Gallelli being 5 years behind in clearing out her inbox. I was not aware until Mr. Masur’s letter this month that for 14 years the Village Manager was personally involved in a formal review “process” but based on Mr. Masur’s new information I am less certain of my previous view that the current Village Manager is “non-political.” 

I understand that as a Croton political boss, Mr. Masur is privy to more knowledge of the “process” than the rest of us here in Croton, and so it would have been helpful if Mr. Masur had disclosed back in 2015 that the Village Manager had—personally and after a review “process”—approved this inappropriate political use of municipal resources.

There is a sharp distinction between what individuals and political groups do versus what is done by the municipality; it is that distinction which separates Village Hall from Tammany Hall.

My letter in this newspaper a few weeks ago was addressed to the positive ethical standard that was set by that 4-1 Board resolution vote of November 2017. After reading Mr. Masur’s new information it appears that the resolution was more necessary than we residents knew at the time.

Paul Steinberg

Croton’s 120th Anniversary

Today marks the 120th anniversary of the incorporation of the Village of Croton-on-Hudson, which took place on February 12, 1898.

The Manual of Westchester County, published the same year, noted that a special election was held “on the question of incorporation” and “the electors of that locality . . . cast seventy-four (74) votes in favor of the proposition and twenty-one (21) votes against.” Croton’s population at the time of incorporation was 1,244 people. Today, it is more than 8,000.

Brickmaking was still a major industry in the village and the construction of New Croton Dam, which began in 1892, had finally reached the point where the Croton River had been diverted around the construction site, 1,821,400 cubic yards of earth and 400,250 cubic yards of rock had been excavated and the immense foundation was finally being laid.

Learn more at the blog Croton: History & Mysteries.

 Riverside Avenue in the early 1900s.

Riverside Avenue in the early 1900s.

Ethical Practices in Croton’s Government

This letter was published in the Gazette on February 8, 2018.

To the Editor:
New York is a phenomenally corrupt state, and as Governor Cuomo prepares to stand for re-election he is under fire for not doing enough to effectuate his pledge to clean up Albany.

But as even the Cuomo-unfriendly New York Post has noted, many of Governor Cuomo’s reform proposals have been blocked by Republican members of the legislature. The lax standards for ethics benefit the self-interest of both parties in Albany, and that is unfortunate.

What is equally unfortunate is the editorial stance of The Gazette (Nov. 30-Jan. 6 issue: “Outgoing Croton administration changes ‘compensation’ policy”), and the subsequent echo of that stance by Amy Ferrara (Gazette, Jan 18-24), when the Village of Croton took steps to ensure high ethical practices in Croton’s government.

The resolution which passed on November 20, 2017 regarding Board of Trustees’ compensation is available on the Village website, as is a video of the Board discussing the resolution.

At no point during the discussion does anybody discuss Ann Gallelli, nor does the resolution say anything about Ms. Gallelli.

The language of the resolution is clear, and it references both the statutory and ethical rationale for the resolution. Neither of those matters were addressed by the Gazette article, nor were they addressed by Ms. Ferrara.

There was a tradition in Croton that the Village newsletter was a patronage stipend given to a Trustee. Arguably that was always in violation of Chapter 54 of the Village Code, and certainly it was one of those “traditions” that needed to be changed to comply with the existing law.

You might disagree with Mayor Dr. Schmidt’s handling of the newsletter, but there is no disagreement that he led by example: taking the newsletter out of the political patronage trough and directing that the Village Manager handle the matter in a non-political manner.

For 2 years, Dr. Schmidt left the production of the newsletter to be done by the Village staff. This practice not only saved money, but it also removed even the perception of politicization of this municipal resource.

That is not “petty vindictiveness,” it is ethical stewardship that respects the citizens of Croton and our inclusive representative democracy.

Nobody from Croton United ever got any pecuniary benefit from the newsletter, nobody from Croton United ever got state pension credit for production of the newsletter, and nobody from Croton United ever used the newsletter to bash their electoral opponents nor their electoral opponents’ respective employers.

Dr. Schmidt’s position on public service as a privilege and not an opportunity for personal gain is well known and longstanding. That is what he did with the newsletter.

To suggest (as the Gazette article does) that this position was “specifically” directed at a particular individual is to ignore both the precedent which Dr. Schmidt set and also the black letter language of the resolution. The resolution applies equally to all individuals, just as Chapter 54 applies to all individuals serving on the Board of Trustees.

Have we become so cynical that we prefer to believe that Dr. Schmidt and Trustees Pugh, Anderson, and Walsh were acting out of hidden spite rather than acting in what they honestly believed to be the public interest?

The resolution passed 4-1, and even Ms. Gallelli explicitly stated that her grounds for opposing the resolution were procedural and not substantive. In fact during public colloquy with Mr. Walsh, Ms. Gallelli said she was not taking a position whether the resolution was substantively objectionable. The municipality is not preventing anybody from publishing a newsletter.

In 2018 anybody can set up a website or Facebook page and reach a global audience with negligible to zero cost. And anybody can write to their heart’s content and email their views at no cost whatsoever.

All of us have a right to express our viewpoint. What we don’t have is a right to force the taxpayers of Croton pay for that expression nor to lend the imprimatur of the municipality to our personal expression.

The Village newsletter is now being produced under the supervision of the non-political Village Manager, and that is a step forward into a new age of ethical and transparent governance.

Albany could take a lesson from Croton: stop working backwards from the “What’s in it for my party!” demand and instead start working forward from the “What’s the right thing to do?” perspective.

All of us have a role not simply in changing the current climate of political ethics, but also in supporting and advocating for written policies that foster good government. Just because politicians have always done a particular practice does not mean that we as citizens should not make a change for the better.

Paul Steinberg
Croton-on-Hudson

Community Choice Aggregation

This letter was published in the Gazette on December 9, 2017.

To the Editor: 
Despite several years of public discussion, some politicians in Croton continue to make false and misleading statements about residential electricity purchasing and “green” energy.

Most recently, the article in the November 9 Gazette made statements regarding “Community Choice Aggregation” (“CCA”) and electric usage which are not entirely correct.

CCA is a type of “Energy Service Company” (ESCO).

These have existed for 20 years in New York State, and any consumer (except those on low-income energy assistance programs) may choose an ESCO. Con Ed itself shed the generation side of the business and is now an energy network operator.

Screen Shot 2018-03-09 at 12.13.56 AM.png

CCA is a sub-group of the ESCO universe. The distinction is that unlike a normal ESCO where you affirmatively choose to have a particular company supply your electricity, the government forces you into the CCA unless you affirmatively take action in writing to use a different company.

The Gazette quote about the savings from CCA being “speculative” is correct insofar as the projections from Sustainable Westchester (SW), whose electricity affiliate is now known as Westchester Power, were purely guesswork back in 2015.

But it is also true that the calendar year 2016 “savings” of $26 now being claimed by Westchester Power is misleading insofar as Westchester Power compares a market-rate product (kWh purchased from Con Ed) to a tax-preferenced product (kWh purchased from an ESCO). 

Any ESCO should be cheaper for a consumer than the regular Con Ed rate. This is due to the fact that ESCOs are subsidized pursuant to NY Tax Law 1105-C.

That law was passed in 2000 to override a 1999 ruling from the NYS Department of Taxation and Finance which taxed ESCOs the same way as Con Ed. Legislators wanted to stimulate electric choice.

The 1105-C tax subsidy has grown from $30M in 2001 to $118M today, without evidence that the subsidy has resulted in increased competition, reduced retail price, or reduced carbon output.

That $118M is going to grow exponentially as the entire customer base is pushed into CCAs, and it already results in a regressive tax burden as consumers living in large private houses benefit most from the tax exemption.

In addition there is empirical research showing that the tax exemption is resulting in higher prices to consumers, since ESCOs can sell for a higher price and still undercut Con Ed since ESCOs don’t charge sales tax.

As a result, there is now a bill pending in the NY Senate which would eliminate the tax exemption.

The thought is that the ESCOs are getting windfall profits (Westchester Power netted $223k on $393k gross in just the first 8 months of operation) by not passing along the tax breaks to their consumers, and that repeal of 1105-C will result in lower cost to electricity consumers.

Whether this is objectively true is a separate issue, but the perception (and politicians salivating over getting an additional $118M in revenue) is driving introduction of repeal legislation in Albany.

No doubt Westchester Power and other beneficiaries of the tax subsidy will be lobbying heavily to stay on the gravy train, but as CCAs start to see the millions roll in they are going to become increasingly attractive targets to legislators.

Most of the “savings” claimed by CCA advocates don’t actually come from any bulk buying power, the “savings” come from use of a tax subsidy which any consumer can get by selecting an ESCO. In fact, it is sometimes cheaper for a Croton resident to get electricity directly thru an ESCO than thru the SW (now Westchester Power) CCA program.

The SW program used Con Edison’s ESCO subsidiary. Due to collapsing margins in the wholesale market, Con Ed sold that subsidiary to what is now called Constellation. (The wholesale electric market entails significant pricing risk which can be offset by hedging on the futures markets, but it is not clear as to the exposure of SW/WP nor any risk mitigation efforts in place).

For much of 2017, you could sign up with Constellation at a price slightly above SW’s rate but you also got a $50 cash-back card, which meant that for most households the individual ESCO price was slightly better than the “bulk buying” SW price.

The original SW CCA price was 7.38 cents for regular and 7.68 cents for “green.” As of May 2017 those rates increased by 0.32 cents due to state-mandated taxes to subsidize nuclear power plants and infrastructure development.

The current Constellation rate to lock in for 36 months is 7.59 cents. The Con Ed non-contract rate for October was 8.30 cents with an adjusted rate of 8.80 cents.

In short, it is misleading to say that savings are “speculative” because an apples-to-apples comparison is always going to result in an ESCO being cheaper than remaining on Con Ed. That has nothing to do with any savvy negotiating by the CCA but rather due to a built-in tax break resulting from a statutory override of otherwise-applicable NYS law.

Parenthetically, lower electric cost can result in increased environmental damage. A study in the current issue of Science Advances documents a global surge in electricity use and light pollution as LED lighting has made it less costly to light outdoor areas.

I also object to the Gazette statement that SW offers residents “the opportunity to buy their power from 100 percent renewable resources.” Apart from the fact that individual residents can sign up right now to get energy from the same provider as SW, there is the inaccurate assertion of fact regarding “100 percent renewable” electricity.

I doubt that this is even possible with current technology, and I don’t see any support for this statement with regard to Westchester Power.

SW/WP is touted with the implication that you can leave your house lights burning bright and still reduce your carbon footprint because you are using “green” power. That may be true, but the SW proponents don’t tell us how that is possible.

In fact, it appears from Westchester Power statements that they are not using 100% renewable power but rather are buying Renewable Energy Credits (“RECs”) and that is a vastly different concept.

RECs may have zero impact on carbon reduction and in fact may result in an increase in carbon output. It is for this reason that many environmental progressives oppose the current REC marketing hype.

This lack of efficacy is because of how most RECs work; not all RECs are created equal. Most people don’t know the difference between types of RECs.

Mr. Pugh has experience with the energy markets (as noted in the Gazette article) and Ms. Horowitz has advocated extensively for Sustainable Westchester since 2015. It is all the more troubling when politicians who have researched the issue (and SW/WP) try to mislead the residents of Croton.

An REC is the modern version of buying an indulgence to expunge the sin of carbon gluttony, and it is customarily every bit as worthless as a medieval indulgence. There are RECs that have a meaningful impact, but they are very expensive and hence rarely purchased by “green” power ESCOs.

The typical consumer with “green” power pays a premium, but her lightbulb is powered by the same “dirty” legacy power generation as her neighbor who uses Con Ed.

The only difference is that the “green” consumer pays extra to a company which takes some of that premium to purchase an REC. So the company might go to the operator of a wind turbine in the California desert and pay the turbine operator for putting a megawatt into the electric grid.

In theory, this will “offset” the Croton resident’s use of a dirty kilowatt. Common sense has led economists and environmentalists to therefore question whether “green” power which merely buys RECs is a waste of money.

The typical rebuttal is that while purchase of an REC doesn’t actually reduce current carbon output, it incentivizes development of new renewable resources.

However, most RECs are very cheap (Colorado even had negative price RECs a few years ago!) and therefore are not a factor in new projects: government subsidies, tax incentives, and regulatory mandates are the dispositive factors.

In 2013, peer-reviewed journal Sustainable Energy noted that voluntary-market RECs are discounted to zero by wind power developers unless they are reliable and for a duration of more than 3 years. This suggests a productive solution: only buy RECs that make a difference.

Some types of RECs work, commonly in cases where the REC parameters are set by regulators as part of a statewide goal of reducing carbon output.

Such “compliance” RECs are mandated by state Renewable Portfolio Standard (“RPS”) regulations. Those are structured in such a way as to effectuate reduction in carbon output.

But RECs that actually make a difference are expensive. That is why you see “green” ESCOs such as Westchester Power telling you how many RECs they have purchased but providing no details on the type or cost of those RECs.

Publicity releases putting stress on the raw number of RECs purchased rather than the nature of the RECs purchased is a big red flag when someone tries to get you to pay a premium price for “green” energy. 

CCA “green” energy is pitched as a painless, cost-free way to save the planet. The truth is that it is at best virtue-signaling and at worst it damages the planet: When we think that being energy-efficient has no environmental benefit since we are 100% “green” there is no incentive to reduce kWh usage. 

I have a house which is pushing the century mark. It has taken years of work to replace old appliances with Energy Star models, install new lights, and weatherize the windows and attic. It is not cost-free and it requires work.

But I have made great progress in reducing monthly kWh usage, and while the gas usage is more difficult given Croton winters I have managed to make some headway on that and found that a modest investment in sweaters and attic insulation is quite carbon-friendly.

Beware when people in Croton (especially politicians) speak in vague generalities about how CCA will save the planet while saving you bucketloads of money.

When you hear the talk about how brilliant the folks at SW are in using “bulk” purchasing power to save money, ask about 1105-C and what happens if taxpayers are not compelled to subsidize ESCOs anymore.

When you hear about saving the planet, ask them to tell you in detail about what type of RECs they are going to buy, at what price, and how the RECs will actually reduce carbon output rather than be a giveaway to existing generator companies.

Most importantly, when politicians tell you that your home is going to run on 100% renewable energy, understand that with current technology this is almost certainly an outright lie.

Eventually “100% renewable” may be possible (such as with the massive lithium ion battery being tested in South Australia), but we live in 2017 and need to be honest with ourselves about the current state of science.

Fossil fuel usage is a critical environmental concern. As with most intractable problems, resolution requires hard choices and sacrifice.

If Croton politicians or Croton residents actually wish to reduce carbon output, they can demand that their CCA purchases fund new renewable energy (“forward” RECs) or at minimum that they are paying for RECs that actually reduce carbon output (RECs that are “additional”).

Demand details, and don’t fall for a sales pitch long on environmental platitudes but short on specifics.

Sanctimonious politically-correct virtue signaling makes us feel superior and noble, but it does not solve the very real problem our planet is facing.

Paul Steinberg
Croton-on-Hudson

Resolution Prohibiting Additional Compensation for Village Trustees

Last night—during our final board meeting—we adopted a policy stating that “no member of the Board of Trustees may, during their elected or appointed term of office, collect any salary or other compensation from the Village of Croton-on-Hudson arising from any paid employment for work that falls outside of the scope of the duties of members of the Board of Trustees.”

We proposed this policy for the same reason we adopted a policy to stop the practice of using personal email accounts to conduct official village business. Sections of both NYS General Municipal Law and the Village Code recognize that there are rules of ethical conduct for public officers and employees which must be observed if a high degree of moral conduct is to be obtained and if public confidence is to be maintained in our unit of local government. We believe this resolution furthers these aims.