Local leaders: Tax cap unrealistic
Officials say increase to 1.84 percent proof state lacks understanding of area budgets
Municipal officials in Ulster County on Monday said the increase in the state property tax cap from 0.68 percent to 1.84 percent shows how poorly state officials understand local budgets.
The revision, announced last week by the state Comptroller’s Office, covers municipalities with budgets covering the 2018 fiscal year.
“After two years of tax growth being limited to less than one percent, inflation has crept up resulting in the highest allowable levy growth since 2013,” state Comptroller Thomas DiNapoli said. “I continue to urge local officials to exercise caution when crafting their spending plans.”
Rochester town Supervisor Carl Chipman, the president of the Ulster County Supervisors and Mayors Association, said continuing use of the consumer price index as the property tax levy limit shows that state officials don’t recognize that municipal budgets are affected by factors that may have a different rate of inflation.
“The tax cap is not a realistic figure in the first place,” he said. “I know that health care insurance costs are going to (increase) in the neighborhood of 12 to 15 percent. That’s quite a chunk of my budget.”
Chipman said the tax cap figure is “artificial” because the consumer price index is based on items like food, beverages, and clothing, which don’t affect municipal budgets and doesn’t cover infrastructure costs
and municipal operations.
Ulster town Supervisor James Quigley agreed that the figure is not based on realistic government issues and doesn’t factor complications from shifting property assessments, for example. He said the decline in assessed property values for the Hudson Valley Mall and TechCity have a bigger impact on the town’s residential
tax rates than the property tax cap.
“Specifically to the town of Ulster, the tax cap number in 2018 is an irrelevant number,” Quigley said. “We are challenged with trying to maintain a tax increase that is reasonable in light of the reduced assessments.”
Quigley said that even if town officials are able to keep the levy increase unchanged,
tax rates will still rise by 5 percent because of the changes in assessments. However, he said it will be a struggle to keep the levy from rising sharply because employee benefit costs are expected to rise sharply.
“Given that I’ve already been notified that I have a 16 percent increase in health insurance ... we’re already looking at blowing
the tax cap,” he said.
Ulster County Executive Michael Hein sees the property tax levy limit as irrelevant to developing budgets because of seven years of changing the structure of departments.
“Simply setting a number for how much taxes can continue to go up is slightly disconnected,” he said. “It has been effective in containing the growth in many communities, but my administration has ... focused on lower property taxes.
“If the core issue was property taxes were too high, we have looked to reinvent government, provide more services and still lower property taxes.”