Milton's budget plan relies on reserve to keep tax hike low

PHOTOGRAPHER: David Lombardo

Milton’s proposed budget leans heavily on the town’s reserve fund, using $1.59 million to ensure only a minuscule bump in town property taxes.

The Town Board received the $6.74 million tentative budget from town Comptroller Martin Glastetter on Wednesday night. The proposal contains no raises for town employees and a decrease in general town spending.

While there is still no town tax to fund the highway department, almost $300,000 of town spending would come from a property tax, an $11,581 overall increase from 2011. For a $200,000 house, the proposed increase will be about $1.18 in the Village of Ballston Spa and a $1.67 outside of the village.

The largest source of revenue is projected to come from sales taxes — Glastetter anticipates about $2.54 million. The projection is conservative, comparable to the amount of revenue the town collected in 2010.

Other major sources of revenue include state aid, mortgage tax, fines and forfeited bail.

The big surprise in the budget was how much of it is funded by using the town’s reserve fund. Town Board member Joseph Miranda called the dip into the fund a “substantial number.” “That was used to keep the tax rate where it is,” he noted. “We knew that our fund balance was shrinking every year.”

Next year, though, Miranda says the town might not be able to avoid drastic budget cuts and a large increase in town property taxes, because they won’t be able to fill a 2013 budget gap with the reserve fund. He said Glastetter indicated that the proposed 2012 withdrawal from the reserve fund would drastically reduce the fund, or even virtually deplete it.

“The red light on this is what do you do next year?” Miranda said. “Next year the guillotine might fall harder.”

He characterized this practice of tapping so deeply into the reserve fund as risky and suggested that the fund was probably well below the level recommended by the state Comptroller’s Office. He added that the comptroller’s recommendation was probably too low to begin with and argued that the town could be in serious jeopardy if it had to respond to a natural disaster, which could essentially bankrupt it.

To avoid this possibility, Miranda said the Town Board might have to entertain additional spending cuts and additional increases in property taxes for 2012. He said that any changes that might be made would probably not be “profound.” He was unaware of any discussions so far about job cuts, which were not included in Glastetter’s budget.

Despite the challenges ahead, Miranda remained optimistic that the board would be able to work together in the next month on improving the budget. The Town Board is likely to experience at least 40 percent turnover, but Miranda said this won’t impact the budget that is left for the next board. He added that Supervisor Frank Thompson, who missed the budget unveiling, will be part of the ongoing conversations about the budget.

Miranda characterized the budget as having “no frills.” A large part of the increased spending in the budget comes from mandatory spending, such as contributions for town employee health care and the state Retirement System.

Regarding the town’s future budgetary prospects, Miranda said, “I don’t know where this little journey is going to go, but it certainly is troubling.”

Republican Dan Lewza — who is running unopposed for election as town supervisor in November — said the proposed budget is not fiscally responsible because it cuts too deep into the reserve fund and will leave a big hole in 2012.

“I do feel that [Thompson] put the $1.6 million in there … so we’re in a tough situation next year,” Lewza said. “I feel confident that town board members will do what’s in the best interest of the town and I believe they will not use all that surplus.”

Through a combination of budget cuts and minor tax increases, Lewza said the town could close its budget gap so only $800,000 would be used from the reserve fund. He then backed off the idea of a tax increase and suggested the savings could be realized solely by cutting a little from all the parts of the budget, which he said had “a lot of fat.”

Budget workshops will be held at 7 p.m. on Thursday and Oct. 19. A public hearing on the proposed budget will be held at 7:30 p.m. Nov. 2.