The City of Johnstown Common Council unanimously adopted a $12.9 million 2019 budget that decreases spending, raises the city tax levy by 1.9 percent, and the city tax rate by 25 cents to $12.88 per thousand dollars of assessed value.
City Treasurer Mike Gifford said no one from the public spoke in favor or against the 2019 spending plan during the public hearing for the budget. He said Johnstown’s New York state property tax cap for 2009 allowed for a 2.5 percent tax levy increase, and he wonders if the city should have gone for that level of increase instead of a 1.9 percent.
“Nobody spoke, and I think, and this is my opinion, that if the rate of increase is relatively low that’s what drives the public comments,” Gifford said. “The cap number was 2.5 percent, and when we start the process I generally argue for that number because in terms of financial planning standpoint you always want to keep creating a higher base in the tax levy. It’s not always practical, because you don’t want people to pay more — I think that’s obvious — but from a strictly financial planning standpoint it makes sense to consider a higher increase.”
Gifford has expressed concerns that Johnstown may not be able to continue to offer all of the services it currently does a decade from now if the city’s property tax levy and sales tax revenues are unable to grow fast enough to pay for the annual cost increases for the city’s employees. He said the city is at approximately 50 percent of its constitutional taxing limit.
The 2019 adopted budget decreases spending by about $280,200 from the $13.2 million 2018 budget. Most of the decrease in spending can be accounted for by the elimination of nearly all of the city’s support for the Johnstown Public Library.
Johnstown Mayor Vern Jackson said most of the savings from the elimination of the library funding will be consumed by personnel costs, specifically the raises the city is contractually obligated to give its union employees. Jackson said the budget includes money for raises, not only for the city’s police department, the contract for which is currently awaiting a settlement ruling from the New York State Public Employment Relations Board, but for the fire department and department of public works as well.
“We have to start negotiations with the [fire department and DPW] unions in 2019,” Jackson said.
Gifford said about one-third of Johnstown’s budget is now consumed by health insurance and pension costs, $4.3 million, of which $1 million is going toward pension costs.
The budget also includes 5 percent raises for all of the city’s department heads.
Not including the cost of health insurance and pension costs, Johnstown’s top five departments by spending for 2019 are:
• Department of Public Works, $2.984 million.
• Police Department, $2.11 million.
• Fire Department, $2.09 million.
• City Treasurer’s Office, $306,000.
• City Attorney’s Office, $103,600.
Gifford said the 2019 budget spends about $200,000 of the city’s fund balance, its reserve of unspent tax revenues. He said the city had about $2.1 million in fund balance at the end of 2017, but would like to spend that number down to about $1.2 – $1.4 million, to bring it to the size of about 10 percent of the city’s annual budget.
“Theoretically, that’s where we’d like to be at,” Gifford said.