Revenues are not keeping pace with expenses in Glenville, and residents will again bear the majority of the disparity through a tax hike, albeit one below the state tax cap.
That is what is proposed in Town Supervisor Christopher Koetzle’s preliminary 2013 budget presentation, which he made Wednesday, Sept. 19. He is slated to release his proposed budget Oct. 1.
Koetzle is planning to pitch a tax hike within the tax cap, which would allow for about a $100,000 increase in the property tax levy. He also has not wavered from a pledge to wean off fund balance usage, with next year’s budget using $165,000 less than this year, for a total of $650,000.
The tax burden on Glenville residents continues to be greater than that of surrounding municipalities, with residents supplying around 80 percent of property taxes, commercial 15 percent and the remaining 5 percent coming from other sources, according to Koetzle. Comparatively, Rotterdam and Niskayuna residents bear only around 60 percent of the tax burden. Clifton Park residents bear even less at 50 percent.
“We don’t have the commercial base like they have in Rotterdam, Niskayuna and Clifton Park,” Koetzle said. “This is why this board has been so focused on trying to build a commercial corridor, so that we can start shifting that burden on our residents on to the commercial entities.”
Revenues are projected to be flat despite recent economic development projects, such as Target, Lowes and Mohawk Honda, because of payment in lieu of taxes (PILOT) agreements negotiated between developers and the Schenectady County Industrial Development Agency, according to Koetzle.
“It is our money that is being given away, but we don’t have the ability to impact that giveaway,” Koetzle said.
Glenville PILOT properties total an assessed value of around $83 million, according to Koetzle. If those sites were taxed at full value, property tax revenue would total around $275,000 instead of the current $114,000, he said.
“We’re actually in some cases actually making a negative cash flow, because our services are more expensive than what we are getting in revenue,” Koetzle said.
The town is estimated to pay around $225,000 to fix drainage issues at the Target property, according to town officials.
After the presentation, resident Dorie McArthur questioned why the town agreed on Target if it was such a “bad deal.”
Koetzle said it is better to have a new store than a “decrepit old blight” at the town center. He said once the PILOT agreements expire, the development will “start to pay off,” but it could take 10 to 12 years.
“There is a lot of good news,” Koetzle said. “It just ain’t all today.”
Councilman John Pytlovany added the store would increase the amount of traffic and could spur additional businesses to be attracted to the area.
Koetzle blasted the sales tax distribution agreement recently negotiated and approved by the county and city, which lasts eight years until Nov. 30, 2020.
Towns receive a total distribution of about $7.8 million annually, which is unchanged from the previous four-year agreement ending soon. Those funds will be proportionately split up between each municipality based on real property value.
Metroplex Development Authority’s sales tax revenue given locally could provide an increase if growth is experienced. From the county’s current 4 percent sales tax, Metroplex directly receives 0.5 percent of the revenue generated. Thirty percent of that portion is given directly to towns and villages, with the remainder retained by Metroplex to help fund economic development projects.
The county, though, isn’t required to distribute any sales tax revenue to the towns, so receiving any funds is seen positively by some.
“The town has brought a lot more revenue in sales tax than it did four years ago, but we are not getting anything more for it,” Koetzle said. “The county is confiscating … the sales tax to offset the need to raise property taxes.”
In 1998, the county collected $25 million in sales tax revenue, but that figure has increased to around $60 million in 2012, according to Koetzle. The town’s payment, however, has remained relatively flat across the same time period, he said.
He said the town is being squeezed at both ends between property taxes for commercial business and sales tax.
Glenville’s health insurance costs have historically increased by 10 percent annually, with a similar spike projected, and pensions costs are projected to increase by 15 percent. Both of these increases would total around $480,000.
Koetzle said his budget wouldn’t hold any salary increases, but the town will be negotiating new contracts with three unions.
“I don’t see how we can afford that,” he said of raises.
Koetzle said his budget doesn’t include any staffing cuts “because there is no room for cuts.” The town is already “thin,” he said.
Koetzle said he would submit his budget by Monday, Oct. 1. The board will then review it and can make changes before adopting a final budget in November.
The 2012 adopted budget totaled just over $18.24 million and was under the state-mandated tax cap, which for Glenville was a 3.2 percent tax levy increase.