Town Board Wary but Hopeful on Handling 1%-a-Year Tax Cut

South Mountain Pass drainage work begins, paving proposed

By Liz Schevtchuk Armstrong

New York State’s latest initiative to force local jurisdictions to further cut tax levies — by 1 percent annually over each of three years as of 2017 — caused consternation at last week’s Philipstown Town Board meeting, followed by a measure of relief when Supervisor Richard Shea realized that town cost-cutting already in place promises to stave off at least some hits.

Under the rather complicated multiyear plan, towns, villages and counties must not only stay within the state tax-increase cap of 2 percent or less annually — as required in recent years — but cut their tax levies by 1 percent annually for 2017, 2018 and 2019. If they fail, their residents will lose a state rebate — in Philipstown, $36 on average yearly per taxpayer, by Shea’s calculations. For school districts, according to information on the state budget website, the crunch hits in the 2016–17 academic year.

At a workshop Wednesday night (March 25), Shea discussed the 1 percent rule with his Town Board colleagues, Councilors Mike Leonard, Nancy Montgomery and John Van Tassel. (Councilor Dave Merandy, Cold Spring’s mayor-elect, was absent.) They likewise accepted a bid for drainage work on South Mountain Pass, and Shea proposed paving a stretch of the winding dirt lane to help avoid future problems.

1 percent a year cut

As the state Division of the Budget explains, under the Property-Tax-Freeze Credit program, developed in 2014 to implement a law passed by the state legislature, by June 1 of this year a local government or school district wanting rebates for residents must submit a “Government Efficiency Plan,” specifying ways it will “generate long-term tax-relief for New York tax-payers.” Cutting 3 percent in a single year won’t suffice; according to the state, “the statute requires savings of at least 1 percent in each of the three years” involved.

The DOB says that the 1 percent can come from savings attributable to government sharing of services or consolidations. Sharing might involve common management of property, facilities and vehicles; administrative, financial or human services departments; information technology; and other offices. Local governments or school districts can also go further and consolidate, dissolving one and incorporating it into another jurisdiction.

The 1 percent figure refers to 1 percent of the property tax levy in 2014, not 1 percent of total local government expenditures (possibly covered in part by grants or savings). For Philipstown, Shea said, the 1 percent represents $64,233 per year. (The town’s total 2014 tax levy was $7,165,364, but that included the amount passed through the town budget for the North Highlands Fire District, a sum not included in the tax-freeze calculations.)

On March 25, as the Town Board talked about further budget reductions, Shea observed that “we don’t have the fluff to go cutting. It’s not as if we spend on lavish items.” He said that with the 1 percent rule, the town “won’t be able to do road projects anymore, won’t be able to do capital projects,” and would need to dismiss staff. Similarly, Leonard said the 1 percent rule could mean that “we’re down trying to decide if we can run an ambulance or not,” while Van Tassel predicted “infrastructure is eventually going to fail.”

Five days later, Shea sounded more sanguine.

“At first glance,” he told Monday (March 30), fulfilling the 1-percent-cut-a-year mandate “seemed to be pretty burdensome.” Then he learned that savings realized on a recurring basis since 2012 qualify. One change, implemented in 2013, eliminated the position of town attorney, a job that involved a salary plus benefits and pension. By instead using a law firm on contractual terms, “I was able to cut more than the requisite 1 percent,” Shea said.

Likewise, the town has reduced the number of assessors from three to one, made across-the-board cuts in offices, abolished a Highway Department position and trimmed emergency services budgets, he continued. “All of this is to say that, again, Philipstown is ahead of the curve when it comes to saving taxpayers money. We were under the cap the year before the cap was instituted, and now we will be able to meet and exceed the threshold set for the efficiency plan.”

Shea added that with the items he mentioned Philipstown “will meet that” goal. “This means that the residents of Philipstown will receive their New York State rebate checks,” he said. “It also means that they can have a level of confidence that we are doing all we can to keep the levy as low as possible.”

South Mountain Pass

The board accepted the bid from Sun-Up Enterprises Inc., for $129,876, for installation of drainage pipes along about 600 feet of South Mountain Pass, running uphill from the intersection with Old Manitou Road, just off of Route 9D. Based in Wappingers Falls, Sun-Up submitted the low bid; the other six ranged from $140,000 to $231,769.

“This is something we’ve been talking about for a while,” Shea said. He said the work covers about half of the area needing drainage — it “doesn’t get you to the top of the hill” — and also warned that further drainage efforts as well as paving might follow. “If we’re going to put this amount of money into that road and this amount of drainage into that road, then we’re going to have to talk about putting a hard surface on that road because I don’t want to spend this money and then have it wash down the hill,” he said.

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