GLOVERSVILLE — Mayor Dayton King is poised to announce a proposed property tax rate cut Tuesday night during his 2019 budget presentation.
King’s draft budget shows an increase in overall spending from $17.8 million in 2018 to $18.6 million, but the increase is offset by rising sales tax revenue and use of the city’s fund balance, its reserve of unspent tax revenue.
The mayor’s plan calls for spending about $1.04 million of the city’s fund balance to balance the budget.
“What we’re looking at is lowering the tax rate. I don’t know if we’ll be able to get under $20 per thousand, but we’re going to be real close,” King said. “It’s our goal to get the taxes down without getting rid of any existing services. In fact, we might add a position here or there, and just keep going hard on code enforcement issues and going after crime.”
Since King took office in 2010, his administration raised the city’s tax rate during its first budget in 2011 to $21.71 per thousand dollars of assessed value, but has cut the tax rate three times since then in 2014 ($21.31), 2016 ($21.06) and 2017 ($20.64).
During that time period, the city’s fund balance has grown from $1.6 million to about $7.8 million, even as the city relied on it to help balance the budget, spending $1.2 million from reserves to balance the 2018 budget. The continued growth in reserves has been largely due to sales tax growth from the Walmart Supercenter as well as other revenue increases like the $567,000 the city will get in 2019 from its SMART Waters deal to sell city water into other parts of Fulton County.
King acknowledged that it is unlikely the sales tax growth will continue indefinitely and the city will eventually begin to reduce its fund balance and potentially face a fiscal cliff due to rising costs.
“For 2019 it looks good, but I don’t know how long we can manage this for, five, 10 years down the road. We really need new revenues, or – and nobody likes to talk about it and we don’t have a willing partner – but we need to look at consolidation,” King said.
“Businesses want to see that taxes are going in the right direction. Some people have said let’s not spend the fund balance, let’s hunker down and wait, and that’s not a strategy I want to follow. Gloversville used to have about 24,000 people here, and we used to have a lot of businesses. Now with a lot less businesses and a lot less residents, we can’t spread the burden out like we used to, so we need more businesses and more people building or buying houses.”
2018 Budget Proposal
Total spending $18.6 million
Tax levy $7.9 million
Tax rate (per $1,000 assessed value) Not yet announced
Tax cap override sought? No
General fund draw required $1.04 million
More from The Daily Gazette: