Chester budget exceeds tax cap for the first time

Chester. The increase is needed to make up for town's depleted fund balance, which was used to lower property taxes last year, according to past and current supervisors.

| 22 Nov 2019 | 07:26

The Town of Chester passed a budget on Nov. 20 that exceeds the state-mandated 2 percent tax cap for the first time since the cap was instituted seven years ago.

The increase is needed to make up for town's depleted fund balance, which was used to lower property taxes last year, according to past and current supervisors.

Former Supervisor Alex Jamieson, who crafted last year's budget, confirmed for The Chronicle that the town used $600,000 in surplus funds to give property owners a tax cut.

The current supervisor, Bob Valentine, said the 2020 budget takes another $230,000 from surplus funds. Some of these funds came from the Lake Hills Farms water district, which Valentine said is in good shape, and reduces the tax increase in that district. He said he did not take from lean districts.

The new budget is "a safe budget," he said.

But drawing more from the surplus is still not enough to stay within the cap.

The state would allow Chester to increase its budget by 1.02 percent and still remain in compliance, Valentine said. He said the 2020 budget will exceed the cap by 4 percent. The total budget increase is just over 5 percent.

A town may exceed its tax cap only if 60 percent of its board agrees to the override. A school district may exceed the cap only when its budget is approved by 60 percent of voters.

The Chester town board passed the budget unanimously among the three members present, the minimum for a quorum. Absent were the two outgoing members: Ryan Wensley, who did not run for re-election, and Vinny Finizia, who was appointed to his seat earlier this year but did not win election on Nov. 5.

Prior to the meeting Valentine said the fund balance was not in good shape, but that the town would build it up going forward.

The total 2020 budget is $13,558,392.The total increase is $1,174,959.

Other complications are driving up spending in Chester. Health and benefits costs for town employees increased by almost 300,000 this year, Valentine said.

In addition, 2020 is a leap year, which adds a week's pay period at a cost of $165,000.

Bookkeeper Sharon Conklin told The Chronicle that Orange County will provide the final numbers that will allow calculations of the 2020 tax based on the assessed value of individual properties.

About the tax cap
New York State's 2 percent tax cap was instituted in 2012 and became permanent in April 2019.
Gov. Andrew Cuomo hails the cap as an effective way to control the growth in property taxes in New York, which has among the highest taxes in the nation.
The cap limits the growth in property taxes to 2 percent a year or the rate of inflation, whichever is less.
The tax cap applies to all independent school districts outside of the state's five biggest cities, and to all local governments including counties, cities, towns, villages and special districts.
There are limited, narrow exclusions to the cap, including certain costs of significant judgments arising out of tort actions and unusually large year-to-year increases in pension contribution rates.
The tax levy cannot exceed the cap unless 60 percent of voters (for school districts) or 60 percent of the voting power of the governing body (for local governments) approve the increase.
Source: NYS Department of Taxation and Finance: