Unlike a Year Ago, Carmel Budget Under Tax Cap
The town of Carmel has managed to remain under the tax cap with its 2015 tentative budget, revealed at Wednesday night’s town board meeting.
This year, the budget comes in at $25.4 million with a tax levy increase of $589,914, which equates to 1.7 percent. According to town Comptroller Mary Ann Maxwell, the town just barely managed to stay under the cap, coming in at approximately $37,400 under the maximum allowable increase.
“We’re there but it’s close. It took a lot of time and effort to get there, but we are there,” she said.
With the proposed budget, residents will see a tax rate increase of 2.3 percent, which equates to an increase of $38 for the average homeowner. According to Carmel Supervisor Kenneth Schmitt, this is the lowest tax rate increase in seven years.
The biggest cost driver in this year’s budget is employee compensation and benefit costs, including salaries, health benefits, pensions, and workers compensation. This accounts for $18.3 or 72% of the overall budget. Board members noted that employee numbers have decreased by 14 since 2009 and although they received criticism for not filling those positions, an additional $1 million or more would have needed to be allocated to the budget if town staff was larger.
Schmidt noted that contract negotiations with several groups of employees are currently underway and stated that, if they had been completed before the budget was presented, the town could have possibly offered a lower tax levy. Schmidt explained that the town is currently trying to get unions to agree to contribute to fund a portion of their healthcare costs, to reduce financial strain.
Other cost drivers in the 2015 budget include debt service, for highway drainage, resurfacing, and machinery capital borrowing as well as $150,000 that will be added to a $400,000 reserve for a future town reassessment project.
Unfunded mandates are also costing the town. The MTA Mobility Tax alone is $35,000 per year and residents and board members are hoping to fight against mandates in the future.
“I think this board has been very, very critical of [saying] if they’re going to force us to do something, send us the check,” said Councilman Frank Lombardi of unfunded mandates.
In terms of the state, Councilman John Lupinacci noted that, although town officials worked diligently to achieve a budget that remained under the tax cap, a portion of that success is the result of luck that uncontrollable expenses, including pensions, did not increase as much as they could have.
Resident Michael Barile voiced a concern that even though the budget remained under the cap this time, uncontrollable costs might cause a problem in the future.
“Unless [pensions] are reeled in, we’re not going to get this lucky next year with the state,” he said.
A portion of the savings for this year’s budget also comes from the Reed Memorial Library, which recently became a taxing district, thereby removing $200,000 of expenses from the budget.
The 2015 budget won’t use any money from the reserve fun and, in fact, will allocate $200,000 to be added to the reserves. This is in addition to an estimated $400,000 reserves increase for the 2014 fiscal year.
Last month, Moody’s Review confirmed the town’s Aa1 Bond Rating and removed the negative outlook for the town, which had been in place since 2012. Maxwell explained that the rating could still go back down, if the town fails to continue to increase fund balance or if there is a significant increase in debt ratios.
Lupinacci asked that residents keep this in mind when they question why the town allocates money to the reserves as opposed to other areas.
“Just because we’re out of the water, doesn’t mean we’re not still swimming,” he said.
Over the coming weeks, the town board will continue to work on the preliminary budget, which should be adopted on October 22. A public hearing regarding the budget is set for November 5, and the final budget must be voted on by November 20.
Schmidt noted that although the 2015 marks significant improvements for the town, there is still a lot of work that can be done.
“This town has come a long way; it’s going to continue to be a progressive town. We’re going to continue to build on what we’ve accomplished thus far and what we’ve achieved thus far,” he said.
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