No. Castle $29.3M Prelim Budget Carries 4.5% Tax Hike

 

North Castle officials are faced with some difficult decisions after the municipality’s 2013 preliminary budget was released last Friday carrying a 4.56 percent tax rate increase and a levy that exceeds the tax cap by about $146,000.

The town’s proposed $29.3 million spending plan, which includes the general fund, highway, library and special district budgets, features a total spending increase of about $167,000.

However, another round of sharp increases in pension and health care costs continue to put pressure on the town and its taxpayers. A $629,241 increase in real property tax revenue has been proposed, helping to offset a $659,517 jump in health care and pension costs. In 2013, North Castle will pay $2,983,695 in employee health care costs, an 8 percent rise over the current year, said Town Administrator Joan Goldberg.

Pension increases are even steeper, projected to increase by $438,418, or 22.5 percent. The town will be paying $2,393,609 in pension costs next year. In 2009, the town contributed just over $1 million toward that expense.

Councilman Michael Schiliro said while he had hoped to have no tax increase, he said he expects the board to at least trim the budget to get the levy increase under the tax cap. Despite the pressures, there are no layoffs planned, he said.

“It’s a very hard year. We’ve got a lot of work to do on it to keep any increase down,” Schiliro said.

For the median North Castle home, valued at $903,000, the currently proposed budget would mean a tax increase of $131.28.

Schiliro said he was confident that in the coming weeks the board would be able to find at least $146,000 to cut. By cutting that amount, the tax rate increase would still be 3.74 percent

Revenue in key areas, outside of the property tax levy, is largely stagnant for next year to go along with the spiraling health care and pension payments. The preliminary budget forecasts $1.5 million in sales tax revenue, $25,000 more than what was penciled in for 2012. But the projection for mortgage tax revenue is $675,000, $75,000 less than this year, Goldberg said.

With the threat of a tax hike, Councilwoman Diane DiDonato-Roth said she would once again vote against any budget that has any tax increase and would oppose a resolution by the board to waive the tax cap. In fact, DiDonato-Roth said she opposed the release of the preliminary budget because of the steep increase in the first draft.

She said that even a 2 percent annual increase, which seems reasonable, would turn into a 10 percent increase if allowed over a five-year period. That would hurt many of the town’s homeowners, she said.

“I work for the residents and to keep the taxes as low as they can be,” DiDonato-Roth, who added she would reveal places to cut in the coming weeks. “The services are important but I’m here for the residents.”

Councilman John Cronin said the board will not approve an increase that exceeds the tax cap. While he would also like a flat tax rate, with a nearly $660,000 increase in health care and pension costs that will be difficult to achieve.

“For the residents that means paying more in taxes not for additional services, like more books at the library or more programming from the Rec Department, but simply to cover these out-of-control benefits costs,” Cronin said.

Last December, the town board approved a 1.59 percent tax increase for 2012.

The board will hold a public hearing on the preliminary budget at its next meeting, scheduled for Wednesday, Nov. 28 at 7:30 p.m. A public hearing is also tentatively scheduled to discuss a resolution to exceed the tax cap.