Carmel Supervisor Proposes Exceeding Tax Cap
Last year, Carmel Town Supervisor Kenneth Schmitt was the sole dissenting vote on a proposal to increase the town’s tax levy above and beyond the state-imposed tax cap, which was ultimately adopted by the remainder of the town board.
This year, during the presentation of his 2013 tentative budget to his colleagues, Schmitt said that due to the rising costs of mandated items, and if the town wanted to maintain its AA1 bond rating, the reason why three members of the town board voted to exceed the cap last year, then taxes would have to increase by 8.7 percent in 2013. That would mean that once again, three out of five members of the town board would have to vote in favor of raising the tax levy beyond the state-imposed two percent cap.
If the tentative budget put forth by Schmitt is adopted by the full board, the town’s tax levy next year will increase by an estimated $1.5 million or by 6.5 percent; 4.5 percent over and above the two percent cap.
For what was described as “a typical homeowner”with a property assessed at $216,000, Schmitt said the proposed 8.7 percent increase in the tax rate would translate into an estimated $125, over and above what that homeowner paid last year.
During the meeting, it was stressed several times that residents understand that the annual tax rate is determined by the total pool of money raised, or the tax levy, divided by the total taxable assessed value of properties in the town or in a special district.
Schmitt said that mandated employee-related costs were expected to skyrocket once again next year. These spending increases included a $375,000 increase, or 13 percent rise, for employee health and dental benefits; a $342,000 increase, or 16 percent rise, for pension payments; and an estimated $19,500, or two percent rise, for worker compensation insurance (that over the past two years has increased by almost 90 percent due to injury claims and settlements). In addition, the town’s debt service was expected to increase by $224,500, due to borrowing money for the highway department to pay for road repaving and the replacement of trucks.
“In the 2013 budget, the costs for pension plans, FICA, Medicare, MTA tax, workers compensation and health insurance account for 29 cents out of every dollar,” Schmitt said in his formal budget address.
Echoing a warning she herself made to the town board during last year’s budget process, Town Comptroller Mary Ann Maxwell said the town had been advised two weeks ago by a bond-rating agency to discontinue using $1.1 million in fund balance to balance the revenue side of the annual town budget, as was done in 2011 and 2012, or risk losing its top bond rating, meaning it would cost the town more to borrow money in the future.
Maxwell went on to tell the town board that since 2007, the town’s fund balance dropped from $8.2 million to $3.1 million at the end of 2011.
The tentative budget did not include the elimination of any staff positions, as in years past, but an opening in the police department resulting from a resignation will remain vacant.
In addition to the mandated increases described by Schmitt, the tentative budget showed several large increases in spending at the police department, including contractual pay raises, a $150,000 increase in over time and a $15,000 increase for fuel expenses.
In recent past years, proposals to save on spending by cutting the funding for the town’s senior citizen program and the town’s two libraries, and by eliminating the architectural review board and the video-recording of town board meetings, met with a swell of protest from the community. None of the funding for those items was reduced in the 2013 tentative budget proposal.
In addition to seeing their town taxes go up, residents who live in particular special districts can expect to see those taxes rise, too. Maxwell explained this is because the total assessed value of homes has decreased due to certiorari settlements, small claims and error adjustments; driving up the tax rate.
By state law, the town board must adopt a final budget by Nov. 20. Before that time, the members of the town board will discuss the proposal and a public hearing will have to be held, both for a potential resolution to override the tax cap, as well as on the budget itself; both of which have yet to be scheduled, but are expected to occur by the end of the month or soon thereafter.
Adam has worked in the local news industry for the past two decades in Westchester County and the broader Hudson Valley. Read more from Adam’s author bio here.
