by Kieron Kramer
After a public hearing at 6:30 pm before its regular meeting on Thursday, November 12, the Berlin Town Board voted unanimously, 4-0, to override the State Tax cap; Board Member Rich deLeon was absent because his wife had just given birth. Berlin joins about twenty-six percent of local governments in the State that plan to override the property tax cap in 2014. The property tax cap increase is set either at 2%, like the last two years, or at the inflation rate calculated by the State, whichever is lower. This year the State Comptroller set the inflation rate at 1.66%. This has put a lot of pressure on municipalities all across the State. [private]In theory, if the inflation rate is 1.66% then a tax levy increase of 1.66% should cover inflationary expenses. In practice, if the previous year’s budget underestimated expenditures and the coming year’s budget is more realistic, or accurate if you will, then the appropriations can easily exceed the inflation rate. With “the tax levy necessary for pension contribution expenditures caused by growth in the [pension] system average in excess of 2%” added to the 1.66% cap, Berlin can raise its tax levy by 1.8%, according to Town Supervisor Rob Jaeger. This amounts to about a $7,030 allowable increase, he said.
The 2014 preliminary budget that was adopted in the regular meeting calls for a $19,849 increase in the amount to be raised by taxes, or a 4.9% tax levy increase. The amount to be raised by taxes in 2014, after revenues and fund balances were applied, is $424,926. This is an increase for property owners of approximately 46 cents per one thousand dollars of property value or about a $23 dollar increase for a property assessed at $50,000.
No one, expecially Berliners, disputes that New York property taxes are among the highest in the nation. According to the Governor’s website (http://governor.ny.gov/citizenconnects/) in 2011 the median U.S. property tax paid was $1,917 and in New York it was $3,755 – 96 percent higher than the national median. New York has the highest local taxes in America as a percentage of personal income – 79 percent above the national average. Gov. Andrew Cuomo has hailed the success of the cap installed in 2011 as a way to curb the growth in property taxes. Trying to hold the tax cap line has put intense pressure on local government leaders to practice economy and frugality – which is precisely the point of it. But Berlin has been very frugal over the years and has held the tax levy near to 2% for six years, starting even before there was a tax cap. Clearly, the tax cap is meant for the profligate municipalities and Fire Districts in the state.
Override Is Easy
It was very easy for Berlin to override the tax cap. All that was needed was a 60 percent vote of the Town Board – three votes. A school district would need a 60 percent mandate from voters in a school district election. But Jaeger expressed a good deal of negativity about the process, and he and the Board were not happy about voting for the override.
The public doesn’t seem too stressed about the tax cap override – only two people came to the public hearing. One of them was Sandi Slattery, Chair of the Berlin Fire District Commissioners, who corrected the Fire District’s figures on the Town’s budget summary sheet. Fire District taxes last year were $211,605 not $215,230 as shown on the sheet. Using the corrected (lower) figure for last year means that the Fire District tax levy increase will be 5.9% not 4.1% as originally shown. The Fire District applied the $15,000 in its unexpended fund balance to hold down the increase. “We are out of money; we have no salaries to cut,” Slattery said before leaving when the hearing ended at 6:33 pm.
The Budget
At 7 pm, after the tax cap hearing, a public hearing was held on the 2014 preliminary budget. Supervisor Jaeger went through the highlights of the budget line by line. The budget uses the combined unexpended fund balance from the general fund and the highway fund in the amount of $126,528 to offset an even greater tax increase. Unexpended funds from the general fund of $83,528 were combined with $43,000 in unexpended funds from the highway fund and reallocated so that the summary sheet showed $63,528 being used to offset the general fund and $63,000 to offset the highway fund. “Does a large unexpended fund balance indicate that taxes in the past has been too high?” one might ask.
Jaeger said, “If we keep using our reserve like we have for the last 8 years, the Town will have no reserve funds in 3 years, and the tax levy increase then will be about 36%.” “If we had raised taxes to pay ‘as you go along,’ we would be where expenses are,” he added.
Breaking it down generally, the highway fund will need to raise $11,454 more in taxes in 2014 or a 3.1% increase. Jaeger said this will “just about cover fuel cost” increases but does not include increases in sand or salt expenses. The highway fund benefits from an increase in the State funded CHIPS allocation of $106,046 for 2014, about $23,400 more than in 2013, or 28% more. The general fund will need to raise $8,395 more in taxes for a 35.2% increase. Not to forget that $20,000 from the general fund’s unexpended funds was reallocated to the highway fund.
Specifically, in the general fund, the Assessor’s contractual expense budget line drops to $3,290, 6% less than in 2013, even though the projected 2013 expense is $1,709. The Zoning Board of Appeals and the Planning Board see drops of $2,000, -66.7%, and $900, -64.3%, respectively, in their contractual expense lines. These lines are appropriated to cover the costs of attorneys for those boards. The plan in 2014 is to pay lawyers’ fees for these Boards, if there are any, out of the contingency fund. The contractual expense, for hauling and the like, at the transfer station is budgeted at $10,000 less than in 2013 or -12.6%. All other budget lines in the general fund like the library funding ($7,500), senior services ($5,400), cemetery mowing ($400) and celebrations, which helps fund the Berlin July Fourth Parade, ($1,600) remain the same as in 2013. The Town Supervisor and the Town Board Members will take no increase in remuneration. The Town Supervisor receives $8,240 and the Board Members $2,000 each. The Building Inspector will continue at $9,500. Other officers and Board members remain at the same pay rate as in 2013. Revenues for 2013 are budgeted at the same levels as last year in the general fund. The rental income from the rental of garage space to the County at the municipal complex, $6,000, appears as highway fund revenue.
How did the general fund tax levy increase in spite of these savings? The budgeted amount for the Town Clerk’s lines shows an increase of $2,000, or 20%. Jaeger said that this was to cover the hiring of a Deputy Town Clerk. He said that Town Clerk Anne Maxon needs time off from time to time, and, if she gets ill, a back up who knows the procedures would be needed. The salary of the Highway Superintendent was increased by $600, or 1.5%. In 2013 there was a $15,000 overrun on this budget line, 37.5% over the budgeted amount of $40,000. The budget line for street lighting increased by $500, or 10%. Building inspection expenses are budgeted to increase by $250 over 2013, 1.5%. The youth program budget will increase by $438, 4.2%, which, Jaeger said, was caused by the increase in the State minimum wage rate. The Justices Contractual Expense is budgeted at $500 more for an increase of 12% over 2013 even though the projected actual expense for 2013 is about $800 less than budgeted in 2013. An increase of $200 or 20% is budgeted in the Town Historian’s expense line for the purchase of a copier for the Historical Center in the former Town Hall on Main Street. By far the greatest increase in appropriations appears in employee benefits which is $12,533 or 28.7% more than in 2013 – the bulk of this increase, about $11,500, is State Retirement benefits that, as Jaeger pointed out, the Town has no control over.
When combined with the Fire District budgeted tax levy increase of 5.9%, which is included in the Town budget document even though the Fire District is its own municipality and holds its own budget vote, Berliners will see a 5.2% tax increase in their total tax bills.
“Everybody got less than they asked for,” Jaeger said.
No comments were made by the public. The adopted 2014 Budget is posted on the Town website (http://berlin-ny.us/).
Former Town Garage Rented
Jaeger announced at the regular meeting that the Town has rented the former Town Garage to Northline Utilities for a short period for $1,000 per month plus utilities. Northline Utilities was hired by NYSEG to improve that company’s transmission infrastructure so that a power source can come from Stephentown if the northern supply is cut. Jim Winn said that Northline has offered to drill the holes for the flag poles at the municipal complex. The Sonotubes arrived the day before this meeting.
The rest of the report on the Berlin Town Board meeting will appear next week.[/private]