Per New York State Law, the village filed the tentative 2012-2013 budget on March 20. The proposed budget of $13,978,893 represents a 4.60 percent tax levy increase. In the coming weeks, the trustees will further refine the budget in consultation with department heads and village staff and trim where possible.
This budget is particularly frustrating because the chief drivers in the tax increase are completely out of the hands of the village.
This is what we are facing. During the current fiscal year, we wrote a check to the Comptroller for Bronxville’s pension obligation of $902,000 representing a 22.79 percent increase from the $735,000 paid the year before. In the upcoming budget, we are obligated to the pension fund to the tune of $1.108 million representing an additional 22.8 percent increase. In just under three years, our pension obligation has risen by 45 percent. This is a one-year increase of approximately $206,000. The same folks in Albany who told us to cap increased spending at 2 percent essentially mailed us a bill equating to a 3 percent tax increase for just one item. Though the pension obligation is our largest state mandate, it is unfortunately not the only one. Our obligation to the Workmen’s Compensation Program, with rates set by the State Insurance Fund, increased from $162,000 to $218,000 translating into a 34.6 percent increase in this budget. It would have been even worse had we not received a “credit” based on our favorable infrequency of claims to the system.
We also have our MTA tax obligation which was repealed for small businesses and school districts but not municipalities.
Net-net we will send the state a check totaling $1.341 million for the above mandates and receive back $64,700 in direct state aid.
Equally out of local control are the rate increases in power services sanctioned by the New York State Power Authority. As a result of a recent ruling, the New York State Power Authority was allowed to increase the cost of raw energy to municipalities by 6.5 percent and Con Edison had an 11.5 percent rate increase approved to attach this power to the grid. Now even the cost of operating a traffic light will automatically rise by 10 percent.
In addition, our cost for diesel fuel rose 40 percent in just two years and the cost of unleaded gas rose in tandem with a 39 percent increase in the same two years.
There are also costs in a village budget that one does not even think of and they are rising as well. As an illustration, the village must pay county and town taxes on village property such as the tennis and paddle courts, parks, parking lots and even village hall itself. This number will rise to $55,000 in the upcoming year representing a 21.69 percent increase in just three years.
Also, in an understandable effort to balance their budgets and to try to stay under the 2 percent tax cap, the county and the town have increased fees charged to the village for disposing of garbage and organic waste by approximately 5 percent. Unfortunately, the village has no other entity to pass costs to on the trickle-down theory, save for the village taxpayer.
All of the above have forced the trustees and me to contemplate doing what so many of our neighbors have done and override the 2 percent tax cap. In order to fund the approximately 5 percent tax increase resulting from state mandates plus the other uncontrollable costs and stay under the 2 percent cap, we would have to fire staff and reduce services or find additional revenue sources in the form of increased fees. Adding to this bleak picture is our projection that our share of mortgage tax revenue will remain flat, our sales tax revenues will actually decreased by approximately 2 percent and our interest income dropped a staggering 63 percent in just two years.
Since I have been mayor, we have cut village staff by 15 percent, leaving departments at bare bones level. We are extremely reluctant to reduce garbage and recycling schedules, so the decisions are truly difficult. As a result, we are quite unfairly forced to look like spend thrifts if we override the 2 percent tax cap when in fact we have been careful stewards of your tax dollars. Something in Albany has to change.
It is a sad, sad state of affairs when I, along with most of my colleagues throughout the state, applaud the new Tier 6 pension reform when in fact it will not help local budgets for at least 20 years. As the governor said, it is a reform for the “unborn.” The ultimate irony is that it will only apply to future hires and no municipality can hire because we are busily firing people in order to pay the current pension obligations. But at least the governor touched a subject that has been taboo for decades.
It is quite obvious that the 2 percent tax cap is a resume builder for the White House and unfair given the overwhelming state mandates. However, on the positive side, it has at least shined a light on local budgets and the unsustainable costs resulting from the reluctance by our elected state officials to confront special interests.
To keep our village on sound economic footing and provide the services needed by citizens, it is time taxpayers became the most important “special interest” group.