While the Saugerties Town Board held a hearing on adopting a town budget that exceeds the New York State tax cap, supervisor Fred Costello said that he does not expect the budget to exceed the cap. The hearing was intended to avoid the need for a hurried, last-minute hearing if the board was unable to meet the requirement of a tax increase of two percent (or the rate of inflation, whichever is less) in order to adopt the budget.
“I don’t think we’re going to need to pierce the cap; none of us do,” Costello said at a budget public hearing on Wednesday, November 1. “But I didn’t know our accounting costs were going to be double, and I don’t want to be here in the middle of the month at an emergency meeting to have this conversation, because it would look suspicious, as it should. So, we’re doing it in plain sight.” However, Costello said, he does not think the board will have to increase the budget to more than the two percent maximum allowable increase. “None of us [the town board] do.”
Michelle Numssen asked Costello to explain how the town can increase the taxes by 4.6 percent, yet stay within a tax cap of two percent. “That’s where I think the disconnect is in the public’s mind,” she said.
“The tax cap implies that we can only increase spending by two percent,” Costello said. “But there are certain components of budgets that don’t fall under that, and the other qualifying factor is what the inflation rate is, and if we have ‘cap room’ from years prior.” All these factors influence the actual spending limit, Costello explained.
Costs this year have risen dramatically, according to Costello. “Our payroll increases are about four percent; our health care increase was 10 — that translates to $150,000 or so. Our insurance is going up about 30 grand. When you put it all together and add payroll in, it’s pretty easy to see how we came up with $400,000 in new spending. We have to pay our employees what we’ve agreed to; we have to make the health care payment; and we have to make the insurance payment.” In addition to this “baseline,” the town also must find creative ways to cover the cost of “the things we would like to do.”
“Aren’t you bringing in more money with the tax?” Numssen wanted to know. “That’s reflected in here,” Costello replied. “Spending is up 4.6 [percent]. The rate is down 12.26. The rate is the amount we actually assess your home on.”
The reason the taxable value of a property can go up, yet still be a smaller percentage of the total, is “trending,” Costello said. For example, a commercial property in the Town of Ulster, which has not sold for $1,400,000, but was assessed for $600,000. “The difference, that $800,000, was being spent among everyone else, so people were paying more than their share of taxes because that property did not realize its true market value.”
Because Saugerties calculates taxes based on true market value, Saugerties residents pay a smaller tax in services that are supported by all its neighbors, such as county taxes, Costello said. “The state does the equalization, and they are good at it. If you go on Zillow, they will tell you what the market value of your home is today, and tomorrow it will be different. We do this on an annual basis looking back 12 months, so changes in the market values are reflected in those rates.”
“With all that money coming in, why isn’t it helping to keep the taxes low?” Numssen asked.
“The tax bill is not just the townwide taxes; that’s what we’re talking about this evening,” Costello said. “There are fire districts, which are associated with where you live; library, which is associated with where you live; the MFA [Medical Financial Assistance] contract which we participate in; and water and sewer — if you live in those districts, you get those — and the lighting districts.”
There are also taxes from the county, “so there are a lot of different taxing districts,” Costello said. “We take responsibility for the money we are about to spend, and I think we’ve done as good a job as any of our peers, if not better, and the other folks — I’m not saying they did a bad job by any stretch — but they have to explain the metrics of the conclusions that they come to.”
On paper, Saugerties is worth about two-and-a-half billion dollars, Costello said. So, revenues from new projects do not make a very significant difference in the overall market value of property. “For instance, there’s a new project down by us, it probably has a market value of $30 million. That’s something, but it isn’t going to significantly change the burden we all share.”
Councilman Zach Horton said that it seems unfair that a property whose value increases from $600,000 to more than a million is not taxed on the full amount. “How is that even legal?” he asked.
Saugerties assessments are very close to actual property value because Saugerties, unlike most communities in Ulster County, uses “trending” in determining the taxable value of property. Trending is the use of such comparisons with other communities as valuations for school taxes with other towns in the same school district, actual property sales records and other information to obtain actual values. The process can be difficult, and can lead to complaints from property owners whose property has increased in value, but it is the fairest way to figure taxes, Costello said. “We’re the last town in Ulster County that is doing it; all the other supervisors gave up on it.”
Why don’t other communities adjust their values to current market trends? “Because it is difficult,” Costello said. “My phone blows up in May; people are afraid and furious.”
The value of homes in Woodstock changes, as well as in Saugerties, and the state recognizes those changes when they do the rates, Costello said. Catching up after letting assessments vary from actual values can be very expensive; “Frank [Orlando, the assessor] told me that if we had to do a revaluation now, it would cost $800,000 to a million dollars.” Costello said that when Ellenville revalued recently, the supervisor lost his job.
Saugerties has been a leader in adopting tax exemptions for veterans, seniors and disabled people, Costello said. For instance, a firefighters’ exemption of 10 percent means that a property assessed at $320,000 would actually be taxed based on $298,000. Saugerties was the first community in Ulster County to adopt that exemption. Costello gave credit to councilman Michael Ivino for working to get the exemption adopted. “We do that as frequently as changes in the law allow,” the supervisor said.
In response to a question, Costello explained that the town’s portion of taxes represents only a part of what a homeowner pays in property taxes. This pays for the police, the town clerk, building department and so on. School taxes represent about half the annual property tax burden. The total of other districts within the town — fire, library, lighting, ambulance — all those districts combined add up to about 25 percent, and the Ulster County tax represents the remaining 25 percent. Not everyone in town pays the full total; for instance, “If you don’t live in Cafaldo Park, you don’t pay Cafaldo Park water and sewer charges.”
“In the Town of Ulster, there’s no ambulance,” Ann Tomasin said. “They pay county tax, town general, town highway, fire, library and sewer.”
Costello acknowledged that ambulance services are controversial in Ulster County. However, he said, some communities are disadvantaged by not having ambulance services when there’s an accident or illness.
Numssen thanked the town employees who worked on the budget. She noted that budget workshops are open to the public, and advised town residents to take advantage of the availability. In particular, she thanked parks and buildings superintendent Greg Chorvas for his detailed explanation of his department’s budget. “It would be appreciated by this citizen if all department heads would care to engage as thoroughly as you did,” she said.
While she realizes that the budget is driven by many contractual and fixed expenses, Numssen said, “I’m hoping that as contracts come up to be renegotiated in the future, that a very strong eye is put into looking at the various activities that we do increase, such as medical costs just as an example, and calculating [that] the percentage contribution that is required on the town level is also the percentage encountered by the employee.” She noted that the sharing of costs is increasing throughout all industries.
Numssen read off several department heads’ salary increases and questioned whether these raises could have been less, noting that increases more in line with what employees are generally receiving could save taxpayers a lot. She then ran through the budget, pointing out areas where she saw possible savings.
Costello responded that in the current contract, newly hired employees will be required to pay 20 percent of their medical insurance. He also said that the board is still looking at the budget. Taking into consideration some of the discussion at the workshop, there will certainly be some changes made.
The bottom line
The bottom line on the 2024 budget is $13,744,598. The total appropriation townwide is $10,925,918. Revenues are projected to be $2,661,625, and $425,000 will be appropriated from the fund balance, leaving $7,839,293 to be raised through property taxes, known as the tax levy. This is an increase of $320,216 over the 2023 levy of $7,519,077.
Spending totals $1,106,149 for residents of the town outside the village. Estimated revenues are $691,600 and appropriation from the fund balance is $50,000, leaving a tax levy of $364,549, up from last year’s $361,239.
The highway fund, paid for by residents outside of the village, totals $3,600,451. Revenues are estimated at $258,000, and $50,000 in fund balance is appropriated to offset the tax bill. The highway tax levy is projected to be $3,292,451, up $3,364 from 3,289,087 in 2023.
The tax rate in the Town of Saugerties will decline from $3.10 per 1,000 assessed value in 2023 to $2.72 in 2024. At the same time, the tax bill for an “average” home will increase from $854.08 to
$878.04. The increased tax bill, despite the lower rate, is the result of increased property values. The average home had a value of $275,466; the same property would be assessed at $322,757.
The tax breakdown is different for village residents, who pay taxes to the village for services that are provided by the town for residents outside of the village. The most outstanding difference is the highway tax of $440.19, based on a rate of $1.36 of $1,000 assessed valuation. The 2023 rate is $162.30 per $1,000 of assessed valuation, or a total of $447.08; the highway tax would actually be lower next year than this year for the same property.
Overall village tax rate, based on the townwide general fund, library, library bond and ambulance would decline from $4.05 per $1000 assessed valuation to $3.59 per $1,000. Based on the higher assessment, the average bill would increase from $1,114.56 to 1,159,77, a 4.05 percent increase.
A town resident’s tax bill is based on the townwide tax, the town outside the village, the highway, the library, the library bond and the ambulance service. The total bill comes to $1,648.70, an increase of 2.36 percent over this year’s $1,610.74. Again, while the tax rate declined from 5.85 to 5.11 percent, the actual tax paid increased based on higher property values estimated for 2024.
Appropriations could change, Supervisor Costello said, as the town board has asked department heads to go through their budget requests and look for further savings.
Proposed salaries for elected officials include the supervisor, $50,500; four town board members at a total $56,000, or $14,000 apiece; town clerk, $57,000; highway superintendent, $74,626.
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