Tuesday we voted to override the tax cap. That was not on the list of accomplishments I’d been hoping for during my first year in office. There are a few of things related to the 2014 budget that I’d like to note/clarify/correct.
Through this process I have actually come to develop an appreciation for the intention of the “2% tax cap” initiative—flawed and misleading as the formula may be. Having a fixed target of a maximum recommended tax increase commands greater attention to each expense we consider.
Last year the village did not bust the tax cap, however the 2013 tax rate increase was 4.12%, and this year’s will be 2.88%. The tax rate is different from the tax levy. The term “2% tax cap” refers to the allowable tax levy, which is determined on an individual municipality basis. The village’s allowed levy increase for 2014 was actually 1.92%.
Last year, as trustee-elect, I observed most of the budget meetings. This year I asked a lot of questions, and I’ve learned a lot. Next year I’ll have better questions.
During our budget meetings we get to understand the needs and goals of each department, but it takes some additional effort to develop a comprehensive understanding of the budget. Similar to my household, I ask, “Does the allotment of funds reflect the priorities of the community?” I’m going to keep asking that question and keep seeking a deeper understanding of where our tax dollars go and how well they are spent. In our household budget, the funding comes from our paychecks (mostly my husband’s in our case). As trustees, we are responsible for deciding how to most wisely spend income primarily from residents and tax payers—not a position to be taken lightly. Last Monday I met with the village treasurer who was, as always, very helpful. One particular piece of information stands out to me…
75% of the General Fund goes toward salaries & benefits. That actually makes sense. Village government exists to serve the public. Services are provided by people. The General Fund is where your real estate taxes go. The balance of the General Fund (less than a third) comes from revenues like fees for services, permits, et al. The salaries and benefits for most employees are dictated by union contracts. Healthcare costs increased about 10% this year. I could digress into a lengthy diatribe about how our nation’s broken healthcare system is the driving force behind the untenable tax burden for every school and municipal budget…or how ObamaCare is only an incremental effort to fix a system dictated by corporate lobbyists driven by profit rather than healthcare—but then I’d never get to these final points about our village budget…
The village does not “borrow money to pay our bills.” That potentially misleading phrase was uttered at a November BOT legislative session during a comment thanking the village treasurer for his report on the village maintaining our excellent Aa2 Moody’s bond rating. Like most individuals who might take out a mortgage or a car loan, the village often takes out a bond to pay for large capital projects (e.g. a firetruck, a major infrastructure improvement).
If you watched this week’s village BOT meeting, you might have been taken aback by the long list of purchases that will be included in the 2014 budget. However, it is important to look at the funding source for the capital expenses. As a mother of two very active young boys, I’m a big fan of playgrounds. However, if new playgrounds sounds like a frivolous use of tax dollars right now, let me clarify. The source of funding for these playgrounds is the Recreation Trust Fund, not real estate taxes. NYS allows municipalities to charge large developers a fee to be directed into a Recreation Trust Fund that can be spent on improvements like new parks and playgrounds.
Department heads request the equipment they feel they need (not want). The trustees decide which requests will be included in the coming year and which will be delayed. Will we save more by purchasing an item now while rates are low or by waiting one more year? For example, holding off on purchasing a front end loader one year too long may lead to paying a significant amount of money to rent equipment until a replacement can be purchased. It’s a tricky balance.
Do you know anyone who delays replacing their aging roof, boiler, or car one season too long only to end up spending a bunch more money dealing with an emergency repair/replacement? Do you know anyone who concedes to every request from a demanding child only to have a house filled with forgotten toys and unpaid credit card bills? The village trustees work hard not to be either of these extremes. With respect to any particular planned capital expense, you could likely make an argument that we could wait one more year on this or that. And in hindsight, sometimes you’d be right.
While the budget numbers are precise calculations, our predictions of exactly how long to wait on an expensive capital project is imperfect, but not without deliberation. I don’t know if we struck exactly the right balance this year. Residents already feeling overburdened by tax bills are certainly not rejoicing about the prospect of paying more to maintain their existing services. The requests, demands and pleas I receive from tax payers for us to reduce rather than increase taxes are with me as I consider each expense. Please, keep sending your emails, and even come by a meeting once in a while. Your voices matter more than you may realize.