New Scotland is up against the state tax cap with a proposed 2014 budget totaling almost $7.18 million, while maintaining a substantial fund balance.
Town Supervisor Tom Dolin filed a 2014 Tentative Budget calling for a 1.66 percent property tax levy increase. Expenditures between the town’s four main funds would increase by around $24,500. The proposed budget would drain around $330,000 from fund balances and is projected to leave $2.57 million in reserves, which is still 29 percent of next year’s total budget.
There was little flexibility in crafting next year’s spending plan, according to Dolin.
“Between the 1.66 percent tax cap and the slow recovery in the sales tax, we are kind of squeezed,” Dolin said.
There are no layoffs in the budget, but two positions would be eliminated through attrition. Town retirees would also be switched to a different health insurance plan, yielding savings around $70,000.
Dolin said more funds weren’t tapped from the town’s fund balance this year because he expects coming years will be more challenging.
“We anticipate we are going to have to (use more fund balance) over the next few years unless the economy improves substantially,” Dolin said. “It is our rainy day fund and it’s still raining out.”
Dolin said 2014 might be when the town has to dig deeper into its fund balance. He said previously the town has deferred capital projects and not filled vacancies to help balance its budget.
“Over a five-year period our reserves have actually increased,” he said.
While the tax cap was created to slow the rise of property taxes, it has also acted as a deterrent to keep taxes from growing at all. If the town went with a lower tax levy in 2014, that would affect how much could be raised the following year.
This year, the town budgeted around $375,000 from its fund balance, but its four main funds will actually see $146,000 going into reserve accounts.
“We are realizing some of the health care savings. We are realizing some savings from the retirements,” town Bookkeeper Lisa Boehlke said. “We have not seen a high use of Highway Department overtime.”
Dolin said the town also “under estimated” sales tax revenue for this year, which helped bolster the fund balance.
Sales tax revenue, which Albany County distributes through a formula, collected in 2012 totaled $1.8 million, and this year the town is estimated to collect just a few tens of thousands less. For 2014, the tentative budget includes $1.8 million in sales tax revenue.
In New Scotland, homeowners bear 95 percent of the tax burden, with commercial or industrial users picking up the rest.
There is approximately $794 million of assessed residential property in the town and there is more assessed value of vacant land ($39.4 million) than there is of commercial ($33.4 million). The town’s taxable value of land totals $885 million between 4,161 parcels.
Dolin added outside of maintaining the community’s character and quality of life, there are benefits to drawing funds primarily from residential taxpayers.
“We don’t have all of the service requirements that a heavy commercial, retail district would require,” Dolin said. “We don’t have a police force, which if we got heavy into retail we would probably have to provide some kind of police protection.”
The Albany County Sheriff’s Department provides police coverage for the town.
To view New Scotland’s 2014 Tentative Budget, check out our blog post or visit the town’s website at www.townofnewscotland.com.