The proposed 2021 Niskayuna town budget would increase town spending by more than $1 million, but keep the property tax increase under the state’s tax cap.
The draft budget proposed by Town Supervisor Yasmine Syed would see residential property taxes rise by two percent next year, while business and industrial properties, which pay at a different rate that residential properties, would pay 2.8 percent more.
With the town incurring new expenses because of the novel coronavirus pandemic, total spending is expected to rise from this year’s $15.976,044 to $16,988,594, with nearly $8.7 million raised through property taxes. The tax rate on residential properties will rise from $2.68 per $1,000 assessed value to $2.73, and the non-homestead rate will rise from $5.85 to $6.01 per $1,000.
“This tentative budget is an extremely conservative budget that responds to several COVID-19 related economic impacts while meeting and maintaining the town’s needs, priorities and excellent services,” Syed wrote in a budget statement.
The town held property taxes flat in 2020. Syed proposed a one percent increase in 2019, but after budget deliberations that increase was eliminated.
The increased spending being proposed is due to contractually obligated raises for employees, and also increases in costs like the state retirement system contribution, Syed said.
The budget is balanced in large part by drawing $1.6 million from the town’s fund balances — an increase from $761,000 drawn from the fund balances in 2020, and $230,000 drawn in 2019. While the $1.6 million draw-down is what she has proposed, Syed said the amount of fund balance that will be used in the final budget could be less.
“The tentative budget is a work in progress, so I’m hoping we can reduce that,” Syed said on Friday. “It is a rainy day fund; it’s intended for times like these. These really are unprecedented circumstances.”
The town is projected to have balances of about $7.2 million at the end of the year, between its general and highway funds, and any money appropriated for 2021 will be taken from that.
Without drawing on the fund balance, Syed said property taxes would have had to go up five percent or more, requiring the town to break the state tax cap. “It is taxpayers’ money, and we’re utilizing the taxpayer money to hold down the tax increase,” she said.
Syed said the budget doesn’t cut any town staff. She is proposing hiring a human resource director for the town — which could be either a town employee or a contracted consultant — and also hiring a full-time front desk receptionist during regular business hours to check in and screen visitors for illness. There is also funding for an outside grant consultant.
Among the issues Syed said she has been grappling with is an anticipated 20 percent cut in federal and state aid, a 15 percent increase in insurance premium costs, and an “overwhelming” 24 percent increase in contributions to the state retirement system.
In 2021, Syed said she wants to aggressively pursue grants for intermunicipal agreements, refinance the town’s debt due to low interest rates, and solicit competitive bids for insurance coverage. The town also expects to receive about $40,000 in new fee revenue from roll-out of a 5G Verizon internet service throughout town.
The budget is still subject to review and approval by the Town Board, on which all members are Democrats except for Syed, a Republican first elected in 2017 and re-elected in 2019.
Councilwoman Denise Murphy McGraw, the senior member of the Town Board, said the board is concerned about the amount of fund balance being used, and hopes to see that number lowered.
“There are big questions that remain,” she said on Friday. “Going into COVID, the board had been expressing concerns about use of the fund balance, and that’s before a global recession hit. We were relying too heavily on fund balance over the last two years, and now, when things are more dire, we are looking to it even more.”
McGraw said she was also thankful to Schenectady County for the new sales tax distribution agreement, which guarantees that the town will receive the same $3.3 million from the sales tax in 2021 that it did this year, even though the county’s sales tax revenues have dropped in the COVID recession.
Three Town Board budget workshops are planned during October. A public hearing on the budget is tentatively scheduled for the Oct. 27 Town Board meeting, with adoption of the spending and revenue plan expected in early November.