The Gloversville Common Council is set to present a 2019 budget Tuesday night that will trim the city’s tax levy, and knock its tax rate down to $19.95 per thousand dollars of assessed value.
Mayor Dayton King presented an $18.6 million budget plan to the council, which carried with it a $7.9 million tax levy, with a city tax rate per thousand dollars of assessed value of $20.64, back on Oct. 10. The plan included an increase in year-over-year spending of about $800,000. The plan also kept the tax rate flat with no increase by anticipating increases in sales tax revenue and by spending down $1.04 million of the city’s estimated $7 million fund balance, its reserve of unspent tax revenues.
During his budget presentation, King challenged the council to find enough savings to reduce the city tax rate to below $20 per thousand.
Councilman-at-large Vince DeSantis said he believes the council, through a combination of increasing the amount of spending from the fund balance and budget, can reduce the tax levy by $250,000, which would bring the city tax rate down to $19.95.
”I think we can do it. We have a decision to make, whether to save it out of the mayor’s budget, or to use some more of our fund balance to provide the tax cut. I don’t know exactly how it’s going to come out because we haven’t finished yet,” DeSantis said. “The budget also includes the salary increases for the [non-union] salaried positions, so it’s very complicated. You wouldn’t believe how many line items there are, but if you can save a few thousand here and a few thousand there, at the end, it adds up to a lot of money.”
DeSantis, however, cautioned against any deep cuts to city department budgets.
”You don’t want the department heads to be hamstrung, because services are really important. You want the cuts to be things the department heads say ‘yeah, we can live with that.’ You don’t want to be too draconian.”
Since King took office in 2010, 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 including the $567,000 the city will get in 2019 from its SMART Waters deal to sell city water to other parts of Fulton County.
Rising revenues have enabled the city to slowly lower its tax rate per thousand dollars of assessed property value. When 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).
Second Ward Councilman Arthur Simonds said the city ended up using less than the $1.2 million in reserves it budgeted for 2018, which gives the council some breathing room to use more fund balance for 2019.
”We need to give this $250,000 back to the taxpayers,” he said of the city’s fund balance.
Simonds said bringing the tax rate below $20 per thousand could be an important psychological threshold for the public.
”When you see something in the store for $19.99, maybe you’re a little more likely to buy it than if its $20,” he said. “We need to make Gloversville as competitive as possible with the other municipalities in Fulton County, so we can help grow our downtown, get more people and more businesses to move into the city.”
DeSantis said he’s heard criticism from those who believe that the city could face a fiscal cliff from rising personnel costs. He said every move the city makes should be aimed toward growing the tax base.
”In order to continue to remain solvent, when it’s a given that the cost of delivering the same services always goes up, the only way to remain solvent is by achieving growth, by making sure that revenues increase from sales tax, from more people living in the city, the tax base increasing. You have to grow to keep up with that,” he said.
The council is expected to hold its public hearing on the budget on Nov. 13 and then vote on the budget’s adoption Nov. 27.
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