Montgomery County adopts $136.7M budget for 2023

200514f.jpg
PHOTOGRAPHER:

FONDA — The Montgomery County Legislature adopted a $136.7 million 2023 county budget on Wednesday.

Although spending will increase about 7.25% over this year’s budget, the budget will lower the total tax levy to approximately $31 million. That’s down about $161,371, or 0.52%, from this year.

Next year’s budget anticipates $101 million in total revenues and will use $4.2 million from the county’s fund balance. The proposal mostly maintains county staffing and services at this year’s levels and accounts for increased costs from contracts, agreements and state mandates.

“It’s a responsible budget,” Legislature Chairman Michael Pepe said Thursday. “We feel good about the fact we were able to deliver a tax decrease especially during tough economic times like this.”

Legislators made mostly minor adjustments to the $136.6 million spending plan originally proposed by Montgomery County Executive Matthew Ossenfort in coordination with Treasurer Shawn Bowerman.

“We’re in this better financial position, that is a time to grow a budget,” Pepe said.

The major revisions were aimed at reaching a budget without any tax increase. Ossenfort initially proposed a tax levy increase of less than 1%.

Legislators ultimately reduced the overall tax levy by increasing the amount of sales tax revenues projected in the budget to $39.5 million and by completely eliminating the proposed contingency funds totaling $225,000. The adjustments combined are up $775,000 from Ossenfort’s draft.

The contingency fund could safely be eliminated since those funds are essentially an extension of the county’s fund balance, according to Pepe.

The fund balance is projected to grow to around $23 million by the end of the year based on the roughly $43 million in sales tax revenue collected by the county. Only 57% of total tax revenues are retained by the county with the rest disbursed to municipalities within its borders.

Fulton, Montgomery counties

While the county tax levy will drop next year, property owners in the city of Amsterdam, Charleston and Root will still see their tax bills increase due to falling equalization rates. The projected tax rates will increase about 66 cents per $1,000 of assessed property value in Amsterdam; 18 cents in Charleston; and 19 cents in Root.

District 9 Legislator Robert Purtell argued officials should have further reduced the overall levy to eliminate tax hikes for those homeowners. He planned to vote against the budget, but was unable to attend Wednesday’s meeting. Absences are automatically recorded as “no” votes.

“I think we’re overtaxing the residents of Montgomery County,” Purtell said. “I supported the budget itself, but did not support the fact that it affected three communities in an increase in their taxes.”

Increasing the fund balance appropriation by $1 million to $5.2 million could have eliminated the tax hikes for the three affected communities and lowered rates for all other municipalities in Montgomery County, Purtell said.

The county’s fund balance has basically tripled over the last two years due to the substantial growth of sales tax revenues, Purtell said. He said the county should not continue taxing residents at existing levels when the fund balance is building at such a fast pace.

“With prices increasing for everything from gas to sheets of plywood, I don’t foresee that our sales tax revenue is going to be going down in the next few years or anytime soon,” Purtell added.

District 2 Legislator Brian Sweet similarly argued last month more fund balance should have been applied to reduce the levy to aid taxpayers in a struggling economy grappling with rising costs. He pointed out the fund balance levels are approaching nearly 16% of the county’s total budget.

Sweet was the sole legislator present at Wednesday’s meeting to vote against the adoption of the budget. He did not return a call requesting comment for this story on Thursday. The spending plan passed with five affirmative votes.

Yet, Pepe pointed out that the fund balance appropriation in next year’s budget is considerably more than the $3.7 million included in this year’s budget. Officials also boosted the projected sales tax to safely reflect recent collections in keeping with Bowerman’s recommendations.

“There is no guarantee our sales tax is going to continue to grow,” Pepe said. “It’s going to level off at some point.”

Accounting for equalization rates, Pepe said taxes on a home assessed at $200,000 in Amsterdam will increase about $66 next year and taxes on homes assessed at $125,000 in Charleston and Root will rise about $18.40 next year.

Fulton, Montgomery counties

“Just how harshly will these municipalities be affected has to be taken into consideration,” Pepe said. “I think the majority of us feel these nominal amounts can be afforded.”

“I myself live in the city and will certainly be impacted by that as well and had full knowledge of that when I supported this,” he added.

The reason for the rising property tax levels in those communities is also beyond the county’s control, Pepe said. Equalization rates are set by the state based in part on the average sale prices of homes, which have been skyrocketing since the pandemic.

“It’s truly a function of the fact that property values in those municipalities have risen, which is a good thing,” Pepe said.

Those municipalities could undertake revaluations to recalibrate property assessments and their shares of the levy to protect property owners against fluctuating tax rates.

“It may cost them some money to have reassessments done, but it is within their control,” Pepe said. “I think there has to be a limit of how much of our cash flow and our equity we use to correct deficiencies in other municipalities’ budgets.”

Fulton, Montgomery counties

Still, Purtell said the county could have easily avoided burdening residents with another tax hike of any size when many are already struggling with rising costs across the board.

“It makes a difference, especially with people that are buying a house and struggling to make the payments,” he said. “It’s not their fault that the values of properties are increasing.”

Reach Ashley Onyon at [email protected] or @AshleyOnyon on Twitter.

Categories: Fulton Montgomery Schoharie, News, News

Leave a Reply