MALONE — Franklin County may raise taxes up to 5 percent for 2014 to create a fatter cushion against possible revenue shortfalls this year and next.
The proposed tax increase was 8.76 percent initially, but a series of tweaks since the plan was released last month by County Manager and Budget Officer Thomas Leitz adjusted the number down to 2.99 percent.
With allowable deductions and exemptions, that leaves the county just $7,000 under its allowable tax limit.
‘KICKING THE CAN’
Some legislators think that doesn’t leave enough fiscal protection in case something unforeseen and expensive occurs.
“We’re just kicking the can down the road,” said Marc “Tim” Lashomb (R-Malone), adding that increasing the tax levy by 1 percent adds $150,000 to the $7,000 cushion and may mean not having to borrow to meet future obligations.
“We have to convince the public. We’re here to do a job, and we’re running a business. We have a responsibility to not kick the can.”
Legislator Paul Maroun (R-Tupper Lake) agreed.
“We’re at 2.99 percent. We should be at 4 percent and reduce the amount we’d be borrowing a point,” he said. “We’re close, and I hope we’re right, but it gives us flexibility in case we’re off.”
LOAN FROM FUND
The borrowing discussed is from the fund balance of an account that stabilizes the annual expense the county pays into the State Retirement System.
The proposed budget includes using $1 million to lower the tax levy. But Leitz said Friday that legislators could safely take another $250,000 out and repay that fund by borrowing $1.25 million at 3.75 percent interest in 2014, which could be paid back across 12 years.
Not borrowing would mean an additional 10 points to the tax levy in order to repay the Retirement Fund balance.
The county had already borrowed $4 million this year to meet its obligation of making towns and school districts whole from unpaid property-tax warrants.