Tax proposed to shrink town of Colonie’s $18M deficit

A town that for years held the line on taxes and was seen as prosperous and financially healthy may
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A town that for years held the line on taxes and was seen as prosperous and financially healthy may soon ask its residents and business owners to dig into their own pockets to bridge the estimated $18 million town deficit.

Town Supervisor Paula A. Mahan on Thursday proposed a “one-time deficit correction tax” on all residential and commercial property to resolve the financial crisis in town.

It would mean town homeowners and business owners would have to pay an average of $250 on top of other town taxes.

Just after Mahan released her proposal Thursday, Republicans, who ruled this town for decades, voiced their opposition, calling it a terrible idea.

Mahan said that with an estimated 30,000 households in town, the plan would raise about $7.5 million. Another $7.5 million would come from business and commercial property owners.

The bill would be based on the assessed value of a property and the projected average bill would be about $250, with a cap of $500. The tax would be based on a sliding scale and individuals with higher-priced homes would pay more and those on fixed incomes would pay less, said Mahan.

The mechanics and legal issues are still being worked out and the measure must be approved by the Town Board.

At a news conference Thursday at Town Hall, Mahan said the bill would not be due until this fall, or even later, which would give residents plenty of time to prepare and save.

It’s the latest emergency measure being considered by Mahan, who has set out a 10-year plan that includes hiring freezes to bridge the looming $18 million deficit.

“This is the most fair and equitable method we could come up with,” said Mahan.

But the three Republicans on the Town Board, who are now outnumbered 4-3, are not supporting the plan and have said Mahan and her fellow Democrats are overestimating the deficit.

Board member J. Brian Hogan said Mahan campaigned on a platform of open government, but residents are not seeing that openness in the proposal.

“We don’t think it’s a good idea because we have a plan that will eliminate the deficit. I don’t know enough about it to comment,” said Republican Town Board member Nicole Criscione-Szesnat.

“The supervisor keeps us in the dark about most things. I woke up and started reading about this in the paper,” she said.

The Republicans have their own plan to resolve the deficit, said Criscione-Szesnat. “We won’t have to impose any more tax burdens on young families or senior residents.”

Details of the Republican plan were expected to be announced at Thursday night’s board meeting.

Mahan said she’s heard from many town residents about how to decrease the deficit, who tell her: “Why don’t we just bite the bullet and get it done in one shot?”

If the proposal for a deficit correction tax is approved, and the town sells its share of Heritage Park to Albany County as planned for an estimated $2.7 million, it would wipe out the deficit, according to Mahan.

“In 2009 we would not have to raise taxes,” said Mahan, a Democrat who was elected in November when she upset incumbent Republican Supervisor Mary Brizzell.

Mahan said the other alternative is a 25 percent tax increase that would last 10 years, but she said Thursday she refuses to burden the town residents with this level of taxation.

Mahan said the $18 million deficit is a “result of mismanagement” by the prior administration. “This deficit was here when we got here.”

If residents are angry about the deficit, they should be angry that no one on the Town Board was watching over finances in the prior administration for the past seven years, she said.

“Everyone in this town owns this problem and inherited this deficit,” said Mahan, a school teacher before she was elected.

This one-time “deficit correction tax” has been done in other places, including Brookhaven on Long Island.

Mahan said that she is confident that the Democrat majority on the Town Board will approve the measure in the next few weeks.

The town may also ask the state Legislature if it can pursue deficit financing, which gives the town authorization to bond out the deficit. Mahan said this is a safety net and it would have to be approved by a super-majority of the Town Board.

When asked if the Democrats were overestimating the town’s financial problems, Mahan said she disagrees 100 percent with that assessment. She said the state comptroller, town comptroller and outside auditors have agreed and given accurate readings of the town’s fiscal health. Those audits only cover through June 2007, she said, so the actual deficit may be even higher.

Categories: Schenectady County

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