Proposal balances inflation with modest tax increase
The Beacon City Council has scheduled a public hearing for Nov. 7 on the proposed 2023 budget, a $33.7 million spending plan that could include a modest property tax increase for homeowners.
The budget proposes a decrease of about 11 percent in the tax rate for residential properties. However, because assessed values are up nearly 18 percent for residences, the city estimates that the average home (assessed at $400,000) will see a 2.9 percent tax bill increase, which amounts to about $80 annually. With a 10 percent tax rate decrease proposed for commercial properties, those tax bills will likely decrease by about 10 percent.
The addition of $26 million in new or improved properties to the rolls, as well as a renegotiated sales tax-sharing agreement with Dutchess County, will ease the impact on residents. The tax-sharing agreement, brokered by Mayor Lee Kyriacou, will bring more than $1 million in added revenue next year.
“The sales tax bought us a number of things,” said City Administrator Chris White. “One, we’re reducing our reliance on the fund balance. Second we’re able to continue investing in a few new positions and some initiatives. Thirdly, we’re absorbing hits from inflation, particularly in insurance and energy costs, and we were also able to mitigate the tax hike. If we didn’t have the sales tax, that would be a lot higher.”
As always, the budget is broken up into three funds: a $24.6 million general operating fund, a $4 million water fund and a $5.1 million sewer fund. The proposal includes 3 percent increases in water and sewer fees to cover inflation and fund ongoing infrastructure investments.
The city is proposing a $12.5 million tax levy, which is the total amount of property taxes it would take in. The proposal is about $400,000 less than what the state’s tax cap allows.
If approved, the budget will add two full-time positions to the city workforce — a firefighter and a water/sewer maintenance helper — as well as a part-time civilian dispatcher in the Police Department. Initiatives that would receive continued or added funding include a full-time mental health case manager in the Police Department, ambulance service, park bathroom cleaning, the continuation of the municipal compost program and expanded swimming pool hours.
Notably, the budget proposes drawing only $200,000 from the city’s fund balance, or savings. Last year the budget required $585,000 to offset the tax levy. The year before, with sales tax and other revenues lost to the pandemic shutdown, the city spent $2.3 million of its savings.
The City Council must adopt the 2023 budget before the end of the year.