Press-Republican

November 16, 2013

Legislators may hike taxes up to 5 percent

By DENISE A. RAYMO
Press-Republican

---- — 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.

Legislators may be able to pay a chunk of that bill off when an anticipated $1.8 million from an escrow account is released in January as part of a compact the state has with Akwesasne Mohawk Casino Resort.

That income, coupled with $1.7 million in anticipated revenue from future county land auctions, could wipe out the debt and strengthen the county’s bottom line, which took a hit from the State Comptroller’s Office in an audit.

‘GOT BLASTED’

The state said the county used too much fund balance between 2008 and 2012 to keep taxes down and therefore put itself in financial stress with little cash in hand to operate.

Legislators are sensitive to the admonishments, but say they still want to keep taxes affordable for residents.

“We’ve chosen to stay under the cap and got blasted in the audit by the comptroller,” said Chairman Billy Jones (D-Chateaugay). “I hope the public appreciates it. We have to decide, do we go under the cap or do we knock it up a few points?”

BUDGET NUMBERS

The overall tentative budget is $103,623,666, an increase of 3.09 percent from this year.

The tax levy, or amount to be raised by taxes, is $16,178,524, an increase of 8.76 percent.

The average tax increase for a home valued at $100,000 would be $35.28.

Legislators have already said they plan to override the tax cap as a precaution.

Email Denise A. Raymo:draymo@pressrepublican.com

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BUDGET HEARINGS

Franklin County legislators will take comments on whether to override the tax cap at 5 p.m. Wednesday, Nov. 20, at Harrietstown Town Hall in Saranac Lake. That will be followed by a public hearing on the 2014 budget at 5:30 p.m.

They will hold similar meetings the next night in Malone, starting with the tax override at 5 p.m. in the Legislative Chambers of the County Courthouse followed at 5:30 p.m. by the budget hearing.