Some frustrated over Schenectady taxes

PHOTOGRAPHER: Peter R. Barber

Rebecca Lugthart and her husband, Keith, stand on the porch of their Schenectady home sending a message to Mayor McCarthy and the City Council about the proposed tax increase Tuesday.

If someone asked Rebecca Lugthart seven years ago where she would spend the rest of her life, she wouldn’t hesitate to answer: Schenectady.

It’s where she first settled after college. It’s where she spent nearly two decades working with inner city youth. And in 2005, it’s where she decided to purchase a home — the Baker Street home she once described as “one of the eggs in my retirement basket.”

Yet last week, the 36-year-old homeowner reached her wits’ end. She scribbled a goodbye note to the city’s mayor and council members onto a “For Sale” sign and posted it on her lawn.

“I asked them what our city will look like when it drives all the responsible homeowners away,” said Lugthart.

The city last week proposed a $78.9 million budget that would raise taxes by 4.18 percent next year. In the same week, Schenectady County announced its own figure for a proposed tax hike of 7.49 percent. In addition to this, garbage collection fees in the city are set to rise by $20 per household.

News of the proposed increases caused Lugthart and her husband to finally answer a hypothetical question they’ve been asking themselves for a few years now.

“My husband and I had talked about, you know, do we bite the bullet, cut our losses, sell and get out of here?” she said. “Or do we hope that things will get better? I used to really love Schenectady and believe in Schenectady. And at one point, I said I would be in Schenectady the rest of my life.”

They chose the former. The Lugtharts decided to sell their two-family home at 1021-1023 Baker Ave.

When Mayor Gary McCarthy presented the budget last week, he said the increase didn’t seem like “that bad of a number,” but he conceded that when coupled with county and school taxes, the overall tax city residents will face is clearly burdensome.

On Tuesday night, a handful of citizens spoke out at the City Council meeting to demand that their city officials find a solution and lower the proposed tax increase. They vented frustration at what feels to them like a government punishing taxpayers for its own failures.

Tax maze

The 4.18 percent tax increase stays within the state-mandated 2 percent tax cap. Indeed, it increases the total city tax levy by only 0.86 percent — a figure determined using a convoluted formula of exemptions and variables that changes from municipality to municipality.

In Schenectady, the average property owner with a house assessed at $100,000 would see their city taxes increase $56 next year to a total of $1,391. All the while, the city would still run a deficit of $3.1 million it plans to cover by draining its capital projects and tax stabilization accounts.

Last year, Lugthart and her husband paid just more than $5,171 in taxes; that included about $1,800 for city taxes, with the rest going to the school district and county. They live on the second floor of the home and rent the first-floor unit. Despite increasing taxes, they’ve avoiding passing the buck on to their tenants, holding the rent steady.

Lugthart can’t understand why she is the one assuming all of the risk by investing in Schenectady, when it feels like the city isn’t looking out for her and her fellow homeowners.

“I’ve invested culturally, economically and emotionally in Schenectady,” she said.

The Lugtharts don’t believe they’re the only ones who feel like they’re now at a crossroads.

“It chips away from my retirement,” she said. “The more money I pay, the less is saved for my retirement. We love budgeting, but that’s what gets me. I have to stick within my budget. I don’t understand why the city can’t do the same. They’re not doing what they need to be doing to bring in other streams of revenues. They’re riding on the backs of homeowners.”

Renters hit, too

Deborah Rembert has rented an apartment in the city for years. In the same week she learned about the tax increase, her landlord had some more news for her: rent is going up.

“What are we going to do?” she lamented at Tuesday’s City Council meeting. “My taxes are going up and so is my rent? How are we supposed to live in Schenectady if we’re on a fixed income? We are really suffering here.”

Taxes are going up to pay for the city’s blunders, she said.

At one point during her privilege-of-the-floor plea, Rembert got so worked up that she announced she wants to run for an open seat on the council.

“I think the mayor wants me to run for City Council so that I can help out this city, because I can see that you really need me sitting up there,” she said.

City officials remain in the process of tweaking the proposed 2013 budget. Prior to Tuesday’s council meeting, the Finance Committee met to go over line items in the sewer and water portion of the budget.

Hearings

There will be a budget hearing today and Thursday at City Hall at 5:30 p.m. A public hearing on the budget will be held Oct. 22. The City Council must approve and adopt a proposed budget before Nov. 1.

Councilman Vince Riggi is disturbed by the proposed tax increase, calling it “too much” for city residents who are losing their homes and jobs.

“Whatever’s happening is not happening fast enough for these people,” he said. “It’s incumbent on this council to really go through this budget line by line and spend some real serious time with this.”

One way to combat the increase, he said, is to freeze city salaries for everyone not contractually entitled to a raise. But most importantly, he added, the budget needs to be cut to “bare bones.”

After she posted the “For Sale” sign on her lawn, Lugthart received cheers from neighbors who have long felt the same frustrations.

She doesn’t know if she’ll get what she paid for the home she thought would be her last. But she hopes she’ll have better luck in neighboring Saratoga County, where she and her husband will look for their next home.