Tentative 2024 Peekskill Budget Calls for 3.5% Tax Increase
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The Peekskill City Manager’s tentative 2024 budget recommends city officials break the state recommended tax cap and raise taxes 3.5%.
City Manager Matthew Alexander also suggested earlier this month the Common Council look at successive years of higher percentage tax hikes ranging from 3.5% over a period of four or five years.
“This year’s rapidly rising costs, labor and supply chain shortages have stretched the city’s dollars to the limit,” Alexander stated. “Coming out of the pandemic, 2023 proved to be a year of rapidly changing expectations and circumstances. After several years of federal and state assistance so easily bestowed on so many, the pendulum swung and the city, along with everyone else, had to deal with inflated costs and post pandemic labor and supply shortages.”
Alexander is suggesting the city exceed the 2% state tax cap by $326,516. If the budget remains unchanged, the average single-family home in Peekskill assessed at $9,570 would see a jump of $72.64 in city taxes next year.
The $50.97 million budget increases spending by $417,375. To balance the budget, Alexander is recommending using $2.125 million from the unassigned fund balance, leaving the city with more than $3 million for a rainy day. From 2019 to 2021, the city did not dip into its fund balance.
“The city must continue to find ways to reduce costs and attract new sources of revenues,” Alexander stated. “The city must also continue to support existing and new business survival and growth to expand the tax base to lighten the burden on residential taxpayers.”
Peekskill has about 229 full-time and 22 part-time staff, up from 235 in 2022. The tentative budget includes salary increases for staff as per union contract agreements, with a matching 2% increase for non-union staff. Personnel costs, including benefits, account for approximately two-thirds of expenses in the city’s general fund.
Alexander said city officials are bracing for double-digit increases in employee benefits for health insurance and pensions in 2024. During the summer, the city began negotiating with its four bargaining units for a change in its health insurance from the NYSHIP Empire Plan to the Excelsior Plan, which would have reduced premiums in 2023 by $2 million.
The Police Department currently has five vacant funded officer positions, totaling $496,000. Alexander stated three police officers are needed to rotate into shift coverage, which would help reduce overtime costs. An additional parking enforcement officer is being added to the budget that is also envisioned to handle quality of life issues.
The Common Council has been meeting with department heads individually since Alexander unveiled his budget.
According to New York State law, the Common Council has until Dec. 1 to adopt a budget or Alexander’s tentative spending plan becomes the 2024 budget by default.
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