MONTGOMERY COUNTY — The County Legislature on Tuesday unanimously approved a $119.1 million budget with a $1.45 million tax levy increase — 4 percent — although seven of the 11 municipalities in the county will see a tax rate decrease.
All of the county’s tax increase will be shouldered by the city of Amsterdam the towns of Canajoharie, Florida, Glen, Mohawk and St. Johnsville, plus an additional $161,499 stripped off the other towns’ county tax liability.
The tax shift burden is due to changing equalization rates and the increase of a large taxpayer in the town of Florida, the Target distribution center. The town of Florida collectively will pay $3.68 million in county taxes, up $725,259 from 2019.
The county tax levy for city of Amsterdam property owners will increase $534,533, to $5.99 million under the proposed budget. The city’s tax rate will increase 8.7 percent to $18.12 per thousand dollars of assessed value, up from $16.66 for 2019.
Although some legislators had talked about the possibility of using more of the county’s fund balance — its reserve of unspent tax revenues — to lower the tax increase faced by the city of Amsterdam, in the end the Legislature decreased the amount of reserves used in the budget.
“Amsterdam has not endured a tax increase from the county in quite a few years, and this was a function of their equalization ratio going down, from 75 to 65,” District 7 Legislator Michael Pepe said. “It’s not good timing because of the fiscal situation they are in, but the tax increase is going to be about $1.50 per thousand, so a house that may be appraised for $150,000, will have an assessed value of $100,000 and would be paying $150 more per year.”
Last year Amsterdam tax payers received a 3 percent tax rate decrease. Tax burden shifting is typical at the county level, and occurs almost every year due to local control of property assessment, which leads to decreasing or increasing of a municipalities equalization rate, a formula that attempts to measure the gap between what property is assessed for and actual sale price of property.
Montgomery County Executive Matt Ossenfort said reducing the use of reserves was an important part of the 2020 budget.
“This was not an easy budget to vote yes for, but it was the responsible thing to do,” he said. “Through no fault of the county, you have some municipalities having a tax increase while seven of the 11 taxes are going down, and everyone knows the city of Amsterdam is in a tough spot,” he said.
Ossenfort said he favors the county converting to a countywide assessing system, a plan outlined in the county’s recent bid for a $20 million New York state consolidation grant, but he said changing control of assessing power from local governments to the county is a difficult political issue.
“It could work, but municipalities would need to be open to it and they’d have to do a reval before it began, and as [former Amsterdam assessor Calvin Cline] said, you’ll have a third of the people grieving an increase, a third of the people will be happy, and a third of the people will see no change,” he said. “We can provide all of the information, but in the end that is the [municipalities’ choice], we aren’t here to force decisions onto them.”
Pepe, the county’s Finance Committee chairman, said the biggest change in the adopted budget from Ossenfort’s budget proposal was a $375,000 decrease in the use of the county’s fund balance. Ossenfort had proposed using $2.9 million of the county’s approximately $5 million fund balance. Pepe said the Legislature was able to decrease that amount by increasing anticipated sales tax revenue, some of which is shared with the county’s municipalities, by $500,000. The county estimated $31 million in sales tax revenue. The county is on pace to collect $32 million in sales tax for 2019.
Last week the state comptroller issued a report showing the results of its Fiscal Stress Monitoring System, which provided a score for how municipalities are doing based on factors like revenues, expenses and population statistics.
A score of 65 or greater was considered to be in fiscal stress. The city of Amsterdam ranked the highest in New York state with a score of 85. Montgomery County received a score of 48.3 and was labeled as “susceptible to fiscal stress in the future. “
Pepe said a detailed analysis of the 48.3 stress score shows 25 points were based on the county not having enough fund balance.
The tax increase in the budget for the other municipalities looks like this:
• Property owners in the town of Canajoharie will pay $2.38 million in county taxes, an increase of $104,648, with a 5.08 percent tax rate increase.
• Glen property owners will see their tax burden increase by $65,506 to $1.91 million. The county tax rate will increase 2.96 percent.
• In the town of Mohawk, the county tax levy will increase by $137,287, to $2.71 million, and the county tax rate will increase 5.33 percent.
• The town of St. Johnsville’s county tax levy is set to increase by $13,651 to $1.17 million, and the county tax rate would increase 1.72 percent.
Properties in these towns would collectively pay less in county tax levy and receive a county tax rate cut: town of Amsterdam, $84,687 levy cut, 1.92 percent tax rate cut; Charleston, $12,135 levy cut, 1.34 percent tax rate cut; Minden, $22,081 levy cut, 1.38 percent tax rate cut; Palatine, $30,726 levy cut, 1.35 tax rate cut; and Root, $11,872 levy cut and 1.34 percent rate cut.