Doing the math on town budget tax cut

tax cutOne thing is for sure: the preliminary 2014 town budget calls for less tax money to be raised than the 2013 budget.

By how much? That depends on what you compare.

If it’s the town general fund,  .8 percent.

General fund plus Highway Department, 1 percent.

The entire budget, including all special districts, .4 percent.

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Reports last week of a 1.6 percent decrease were incorrect, according to town accountant Gary Newkirk. That number came from comparing the total taxes, including special districts, in the preliminary budget to the 2013 total.

But the preliminary budget erred by including the Malden Sewer District ($146,000) on the revenue line rather than the to-be-raised by taxes line. That doesn’t change how much the residents in Malden pay, though, just how it’s classified.*

When evaluating the work of the Town Board and town supervisor, the general fund is usually compared. This includes the Police, Recreation, Assessor’s and Building departments, transfer station, animal shelter, town clerk’s office, receiver of taxes, most town personnel, and other areas. These areas make up just over half of the amount raised by taxes, and affect everyone. (It should be noted that other lines that have a large impact, like Library and fire departments, have their own elections, and the Highway Department’s relative autonomy and separate tax line is a result of Highway Superintendent being an elected position, while most water and sewer districts are funded through usage.)

With the town supervisor running for reelection every two years, right in the middle of budget preparations, the question of taxes is a perennial political football. This year is no different: incumbent Kelly Myers is running hard on a tax cut, while several board members have accused her of trumpeting the tax cut too soon to give voters the impression that, as the budget process unfolds, the restoration of mandated costs (like $100,000 to the police department) and other adjustments that are part of any budget process would give the impression that the board was throwing in wasteful spending.

That said, Councilman Fred Costello said he’s concerned about the town paying less of its required retirement contributions through a process called amortization. Rather than cut taxes and “kick the can down the road,” the town should consider paying what it can afford now to avoid getting hit later.

Additionally, board members have questioned the budget not including raises for town employees, fearing that contract negotiations with the police department next year will result in arbitration and an order for retroactive pay. (All union contracts are up for negotiation, but the PBA has binding arbitration.)

The budget is still in the preliminary phase. It’s not due until the end of the month. As of last week’s budget workshop, there were still questions to be resolved like vehicle purchases and contributions to non-profits, plus the Rec. Department budget wasn’t ready for the board to look over.

In the face of other rising costs, the .8 percent general fund reduction was achieved through the reduction of about $270,000 in safety net costs, from $400,000 to $130,000, due to the county taking over another third of the burden; not filling vacated positions in several departments; better rates on health care, town bonds and communications costs.

Does this mean your taxes will go down? Again, too soon to tell. Even if these numbers stand, tax rates are calculated each year based on assessments, which are based on changes in the market. These are not uniform.

Finally, keep in mind town taxes are less than 1/5 of total property taxes. So the cut to the part of the budget directly controlled by the board and supervisor now up for debate amounts to about six bucks on taxes for a $200,000 home.***

 

*Malden Sewer District is billed based on unit, not usage. It’s the only district billed that way, says Newkirk.

It is one of the town’s 26 special districts. Some, like library and ambulance, are paid by all; others, like individual fire companies and lighting districts, depend on where you live.

Special districts can make up a large part of your tax bill. For town residents, the taxes in 2013 for the town’s general fund plus the Highway Department were about $5.60 per $1,000 of assessed value ($1,120 for a home assessed at $200,000).

But let’s say you’re a Glasco resident. Like all town residents, you have to include ambulance (30 cents per $1,000), library (28 cents for operations, 25 cents for bond on renovation/addition), plus Glasco Fire Company (71 cents) and Glasco Lighting (18 cents). That’s another $346, bringing your town taxes up to $1,466. That means for Glasco residents, special districts make up 31 percent of total town taxes. And because they draw from a smaller pool of taxpayers, a big expense in a small district (like a new fire truck) could mean a tax hike for one part of Saugerties even if other parts of the town budget are decreasing. Village taxpayers, while not affected by line two of the general fund “Town outside village,” (about 3 percent of the total), have to pay separate village taxes, another $6.76 per $1,000.

**All numbers from Ulster County 2012 Real Property Data Report   which includes numbers from the 2013 town and county tax rates and 2012-13 school tax rate. 

***Total property tax  rate (excluding special districts) in Saugerties is $28 per $1,000. For $200,000 home, that’s $5,600 per year total. Of this, general fund town taxes are  $745.76.  A reduction of .08 percent is $5.97.