GLENVILLE — Town Supervisor Chris Koetzle said the 2021 town budget will be the toughest he’s ever developed because of financial uncertainty created by the COVID-19 pandemic, but he plans to keep any property tax increase within the 2 percent state tax cap.
With uncertainty about future revenue and expected increases in retirement system and health insurance costs, Koetzle said he will propose not replacing employees who retire, reducing capital projects and not giving 2021 raises to non-unionized employees before seeking to break the tax cap.
“I’m going to present a budget under the tax cap,” the Republican said. “With all the challenges we have going on, I think the residents need relief as well, because of everything that is going on.”
The current town budget totals $19.5 million, and it required a 2.94 percent tax, which was within the tax cap for 2020. The draft version of the 2021 budget, which is subject to review and approval by the Town Board, is due to be filed by Sept. 30.
The pandemic and resulting recession have made it hard to anticipate how much revenue the town will receive, he said, especially from state municipal and highway aid.
“It’s going to be the toughest budget I have ever done,” said Koetzle, who is in his 11th year as supervisor. “Mostly because of the uncertainty. There is uncertainty with state aid, the mortgage tax, and there is uncertainty with the sales tax.”
New costs the town will face next year include $162,000 in contractually committed raises, an $100,000 increase in health insurance premiums, and a $200,000 increase in what the town will owe to the state retirement system. Separate from the system contribution, about six town employees are expected to retire next year, which Koetzle said could result in $250,000 in payouts for accumulated six leave.
“We may not be replacing positions immediately,” Koetzle said. “That is one way to deal with the situation. [A job] is not going to be filled immediately or automatically.”
“Capital projects are pretty much on hold,” he said, noting that in 2020 the town had planned to invest in parks and in design of a new Town Hall. State grants for recreational trail development awarded in 2019 are frozen because of the state’s budget crunch, he noted, and purchases of items like new vehicles would also be postponed.
It is also still unknown if the 2020 state aid payments — about $476,000 in general and highway maintenance aid — will be cut 20 percent, as Gov. Andrew M. Cuomo has warned of because of the state’s financial condition.
“What we really have had to do across the entire budget is shift our entire thinking from what it was six months ago,” Koetzle said.
The town has received about $2.7 million annually from the Schenectady County sales tax, but the current tax agreement, which is primarily between the county and the city of Schenectady, expires in November. With the towns not involved in the negotiations, Koetzle said there is “a big fear” that the town could lose revenue.
Koetzle has argued to the county’s Democrat-controlled Legislature that the towns should receive a larger share of county sales tax revenue, as the towns in Saratoga County do. “Every year our personnel costs alone go up by $500,000, without any increase in the sales tax,” Koetzle said.
“We receive less than a penny for every dollar [the county collects],” he said during a presentation to the Town Board on Wednesday.
Koetzle said the town has been reducing debt, cutting annual use of the fund balance and working to expand the tax base for a decade, strengthening the town’s finances. He said that will help next year.
“We’re in fairly good shape to weather the storm,” he said. “We’ve done a lot to reduce our debt, and we’ve reduced reliance on our fund balance, but a reasonable concern is a swing of about $1 million next year, between expense increases and revenue drops — and that’s a lot for even a town that is in good shape to absorb. We’re concerned this could go on for several more years.”
Koetzle will make a presentation on the budget to the Town Board Wednesday night, and will do it again on Tuesday, Sept. 22 at 7 p.m. the Glenville Senior Center.
“The big challenge for the board will be managing the uncertainty before us,” Koetzle told the Town Board. “We’re going to have to make difficult decisions without all the information we should have before us.”