GLOVERSVILLE — Gloversville is one of 20 municipalities in New York state that have exceeded 80 percent of the New York state constitutional taxing limit for 2018, according to a report released by the state Comptroller’s Office.
The office shows Gloversville for 2018 was taxing its property at 87.8 percent of the state’s constitutional property tax limit. This is an improvement from five years ago when it was at 93 percent of its limit.
“It’s been coming down for the last few years,” Mayor Vince DeSantis said of Gloversville’s limit.
New York state has had a constitutional taxing limit — calculated using a formula that multiples 2 percent times the five-year average full valuation of property for cities and villages — in place for more than a century, and in its current form since 1944.
The state’s tax cap limits year-to-year percentage increases of a municipalities total property tax levy, but the taxing limit is the most the state will allow a municipality to tax its property owners, although the formula exempts many types of debt service payments.
The comptroller’s office considers a municipality that is beyond 80 percent of its taxing limit to be in the “high risk zone” in danger of hitting the limit, which triggers penalties from the state that include cuts to state aid.
As Gloversville’s position has improved since 2015, more municipalities have been crossing the 80 percent line.
The comptroller’s report, titled “Hitting the Limit: The Constitutional Tax Limit and its Implications for Local Governments,” shows that the number of municipalities exceeding 80 percent of the maximum amount of property taxes allowed under the state constitution has risen every year since 2012, when there were 7. The comptroller has tracked the statistic since 1998. The peak year for municipalities beyond 80 percent of their taxing limit was 2006, when there were 26.
Out of 60 cities that provided numbers to the Comptroller’s Office for 2018, 10 of them were found to have exhausted more than 80 percent of their constitutional taxing limit, two counties and eight villages also went beyond 80 percent.
Other cities that have gone beyond the 80 percent mark include: Elmira (80.6), Niagara Falls (82.4), Little Falls (83.8), Binghamton (89), Fulton (89.2), Ogdensburg (89.6), Lackawanna (90.9), Yonkers (92.7) and the city of Jamestown in Western New York, which has hit 100 percent of its taxing limit.
Although the Comptroller’s Office highlights the “the withholding of state aid” as one of the potential consequences of exceeding the limit, the report shows that Jamestown actually received additional state aid to “to head off more severe budgetary difficulties.”
No municipalities in the immediate Capital Region have hit 80 percent of the taxing limit.
For the Mohawk Valley Region two villages, Herkimer (99.4) and Ilion (95.9), and the cities of Little Falls and Gloversville all exceeded the 80 percent mark.
State Sen. James Tedisco, R-Glenville, who represents parts of the Mohawk Valley, including Gloversville, said the comptroller’s audit shows the taxing stress placed on upstate New York by unfunded state mandates. In a statement sent to The Daily Gazette, Tesdisco said 18 of the 20 municipalities at 80 percent of the limit are upstate.
“This new comptroller’s report underscores the need for mandate and regulatory relief for our local governments to help reduce their local property tax burden and enable small businesses to flourish, create jobs and add to the local tax base,” Tedisco said. “Too often in New York, it’s our local municipalities and property taxpayers who the state hands the bill to in the form of unfunded mandates.”
The constitutional taxing limit allows New York City to tax 2.5 percent times the five-year average full valuation of property.
Counties are restricted to 1.5 percent unless two-thirds of their governing body votes to raise the percentage, up to a maximum of 2 percent. Fourteen counties have raised the percentage of their taxing limits to 2 percent: Cattaraugus, Cayuga, Clinton, Columbia, Delaware, Essex, Lewis, Madison, Nassau, Oswego, Schoharie, St. Lawrence, Washington and Wyoming.
Montgomery County’s tax levy, at $28.8 million, is at 65 percent of its constitutional taxing limit of $36.6 million.
Gloversville’s total property tax levy for 2019 is $7.65 million, $250,000 less than 2018.
Under former Mayor Dayton King’s administration, the city cut its tax rate four times: 2014 ($21.31), 2016 ($21.06) 2017 ($20.64), and to $19.95 for 2019.
Current mayor DeSantis said his city has approximately $7 million in fund balance, a reserve of unspent tax revenues. The city built up the reserve thanks to increased sales tax from its Walmart Supercenter and from the city’s SMART Waters deal to sell city water into the rural towns of Fulton County.
DeSantis took over the remainder of King’s term earlier this year after King resigned as part of a plea deal after he admitted to stealing some office stamps.
DeSantis said he believes the city can afford another tax cut for the 2020 budget and he’s going to propose it in the fall during the city’s budget process.
“We’re not in trouble,” he said. “We’re in sound financial condition. Our plan is to gradually reduce the tax rate, and it’s been coming down. Our long term goal is to continue this very steady, but responsible, reduction in the tax rate.”