Mayor’s budget projects no tax hike, $3M shortfall

Exterior photo of Gloversville City Hall at 3 Frontage Road in Gloversville. Aug. 1, 2021.

Exterior photo of Gloversville City Hall at 3 Frontage Road in Gloversville. Aug. 1, 2021.

GLOVERSVILLE — The city of Gloversville will start its 2023 city budget process on Monday with Mayor Vince DeSantis’ approximately $22 million budget proposal which does not include a tax rate increase. However, it does include a projected $3 million budget deficit.

DeSantis said he does not expect the preliminary projected deficit to actually happen, and said he sees no reason for any increase to the tax rate.

“What I’ve decided, in my budget, is a flat rate, with no increase or decrease in the tax rate, and I doubt that will change, but the council could change that — they could do a tax cut, but I’m sure they would never do a tax increase,” he said. “We will end 2022 with about $19.7 million in revenue, and we’re projecting in this (2023) budget revenues of about $1.4 million less than we will end this year with. That is very conservative. That’s saying let’s project our 2023 revenues may fall off. I don’t think that’s going to happen, because we’re going to have a lot of construction in 2023, based on the grants that we’ve gotten, the ($10 million Downtown Revitalization Initiative), and all of that.”

Last year, the common council passed DeSantis’ proposed 50 cent per tax rate cut, dropping the city’s tax rate to $19.45 per thousand dollars of assessed value, which adjusted for inflation is the lowest tax rate the city has had since the mid-1990s.

The city’s current-year 2022 $20.3 million budget originally included a $1.8 million deficit projection, paid for in the budget with a draw down from the city’s approximately $4.8 million fund balance reserve of unspent tax revenues. However, on Tuesday night, DeSantis said the city’s 2022 budget shortfall is on pace to shrink to $561,000.

DeSantis said he believes the city will outperform the budget deficit projections in his proposed budget, because the city uses very conservative estimates projecting less revenues and greater costs than are likely to happen. He said the city has projected budget deficits every year since 2014, even though the city actually produced a surplus in some of those years.

“That means that during the years our operations have been more efficient than the worst case scenario (projected in the city budget),” he said. “In 2018, our projected deficit was $1.86 million, but the result was a surplus of $1.62 million. That was the year, if you remember, when we had that unforeseen increase in sales tax revenue, and it made a difference of between $2 million and $3 million to our budget.”

DeSantis said in 2019 the city projected a $1.65 million deficit, but that eventually shrunk to a deficit of $94,000. He said in 2020, the first year of the  pandemic, the city’s revenues shrunk by $3 million, forcing the city to draw down $749,000 more than the council originally budgeted from the fund balance, but then in 2021 a projected $1.6 million deficit turned into a surplus of $708,000.

“In my view (in 2021), was the first year that we received, what I believe to be, actual growth for the city,” DeSantis said. “(City budget figures) indicate that in 2019, the last good year that we had, our total revenues were $19.96 million, almost $20 million, and in 2021 our revenues were back up to that exact level.”

Tuesday night the Common Council agreed to this schedule for its annual budget hearings:

• Monday, 6 p.m. — Police Department
• Tuesday 6 p.m. — Assessor’s office, City Clerk, Mayor’s office, Fire Dept.
• Wednesday 6 p.m. — Transit department, then Department of Public Works,
• Thursday 6 pm. — City finance department and then non-union salary personnel

While DeSantis said the council may increase or decrease spending for his proposed budget, he believes the city will be in a strong fiscal position regardless, with likely higher revenues and lower costs than current projections.

“This is a conservative budget, and hopefully, maybe, a little too conservative, and we’ll take a look at that next week,” DeSantis told the council Tuesday night.





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