Economic trends may force Schoharie County taxes higher

SCHOHARIE COUNTY — County taxpayers will likely get bills averaging about 11 percent higher next year, and in many cases considerably more, Treasurer William Cherry said Tuesday.

The tentative $62.64 million county budget Cherry revealed projects only a 3.2 percent actual average rate increase, but the effect of state property value estimates could drive tax rate increases above 20 percent in several towns.

The projected budget is up about 5.9 percent over this year’s $59.2 million spending, largely due to rising energy costs and expected decreases in state aid, according to Cherry, the county’s budget officer.

The news got even more ominous a few hours after Tuesday’s budget news conference, when Cherry received monthly revenue figures showing sales tax receipts dropped about $368,000 in September compared with the same month in 2007.

In an effort to save an estimated $175,000 in the $675,000 electricity bill the county expected to pay next year, Cherry is recommending the county “take immediate action” to contract with Houston-based Reliant Energy to supply the millions of watts the county uses annually.

Already the county is running about $70,000 over projected 2008 electricity costs as of Sept. 30, according to Cherry.

County Board of Supervisors Chairman Earl Van Wormer III said Reliant Energy officials are expected to outline potential cost savings during Friday’s supervisors meeting.

If such a plan is approved, Reliant could supply the electricity, but National Grid would still be paid for about half the total bill for transmission and distribution over their system.

If a downturn in sales tax receipts proves to be a trend, it could push tax rates even higher next year, unless roughly $600,000 in cost savings can be found, Cherry said.

“That’s a bad piece of news,” Cherry said.

Property and sales tax receipts had been rising in recent years because of new construction and higher retail spending, but this year both have been flat, according to Cherry.

“That [sales tax decline] may be an indicator of a tightening economy,” Cherry said, which could call for further adjustments in revenue projections.

As proposed, Cherry called his tentative 2009 fiscal plan “a hold-the-line, no frills budget” that maintains existing services, without adding any new employees or programs.

While the projected 2009 county tax rate would be an increase over this year, Cherry said it is lower than rates in 2004, 2005 and 2007.

About $975,000 collected this year from the county’s gas tax reserve fund will be used to help stabilize property taxes, he said.

The fund, set up in June 2006, puts aside all sales taxes on purchases of gasoline that exceed $2 per gallon.

The projected county tax increase is largely because “the state Office of Real Property Tax Services has lowered the equalization rates for many towns, indicating that ORPTS believes property values have increased greatly from 2007 to 2008,” Cherry said.

“I think they are wrong,” Cherry said. While the tax base is expanding in the county, “the expansion is mainly due to lower equalization rates, not true growth,” he said.

While agreeing with the “concept” of adjusting local assessments to reflect market values, county Real Property Tax Services Director Marjorie Troidl agreed Thursday that the state appears to be overvaluing some local real market values.

With home construction, property subdivisions and business growth stagnant, Cherry said, “these additional property tax revenues are being collected from the existing pool of property owners.”

“Lowering equalization rates has exactly the same effect as raising assessed values or increasing tax rates — higher tax bills for existing property owners,” Cherry wrote in his budget outline.

Only Richmondville, which has gone to 100 percent market-value assessment, will see a tax rate decrease next year, according to Cherry.

Richmondville’s county rate will drop 5.66 percent, based on the tentative budget.

Projected rates in the other 15 towns in the county are expected to rise as follows:

Blenheim, up 17.03 percent; Broome, up 7.93 percent; Carlisle, up 23.88 percent; Cobleskill, up 8.06 percent; Conesville, up 6.59 percent; Esperance, up 14.20 percent; Fulton, up 4.20 percent; Gilboa, up 2.16 percent; Jefferson, up 2.97 percent; Middleburgh, up 8.02 percent; Schoharie, up 14.08 percent; Seward, up 23.96 percent; Sharon, up 23.84 percent; Summit, up 13.83 percent; and Wright, up 14.05 percent.

Most nonunion county employees would be in line for an average 4 percent pay increase under the tentative budget, including elected officials and department heads. Union contracts are projected to be negotiated in the same range.

The only exception to the 4 percent average raise is a proposed 15 percent increase for the two part-time Board of Elections commissioners.

Annual salaries for Democratic Commissioner Clifford C. Hay and Republican Commissioner Lewis L. Wilson would rise to $18,775, up from $16,275 currently.

Van Wormer said the commissioners requested the increase because they said they are putting in about twice as much time working, largely because of federal requirements to change voting machines to help Americans vote.

After reviews by the county’s finance committee, a public hearing on the proposed budget is expected to be held next month, before supervisors adopt a final spending plan for 2009 in November or December.

While some “minor adjustments,” are typical, Van Wormer said he foresees “no sweeping changes” to the budget Cherry is proposing.