Rising health care and retirement costs plus flat sales tax revenue are putting a squeeze on the town’s finances, says town Supervisor Chris Koetzle.
Health care costs have gone up by at least 10 percent every year and are increasing by $150,000 to $180,000 this year. Pension costs are increasing by about $200,000.
At the same time, revenues are flat, according to Koetzle. He criticized the recently negotiated sales tax agreement between the city of Schenectady and the county. The county’s share of the sales tax revenue in 2012 was $60 million and the city’s was $11.7 million. The towns are splitting the rest, $7.7 million, which amounts to roughly $2 million for Glenville.
In 1998, the county netted $25 million in sales tax for its operations. The big jump has allowed the county to keep its property tax rates in check.
“The county is confiscating the sales tax to offset their need to raise property taxes,” Koetzle said Wednesday at a town budget forum.
The town is accounting for more sales tax being collected than four years ago with new developments such as Lowe’s and Mohawk Honda, but it is not reaping those benefits, Koetzle said.
He also criticized the county for a 7 percent increase in election expenditures. Six years ago, when the town ran its own election, the cost was $45,000. Next year’s cost will be $386,000.
Another issue outside of the town’s control is payments in lieu of taxes, which are negotiated between developers and the Schenectady County IDA. Because of existing PILOTs, Glenville will receive only about $114,000 in tax revenue when it could have received $275,000 if the properties were taxed at the full rate.
The new Target opening next month on Route 50 will be under a PILOT, for example. Resident Dorie McArthur questioned whether it was worth encouraging Target to come here.
Koetzle said more development in town does keep sales tax dollars within the county and raises the quality of life for residents who would prefer to stay in Glenville to do their shopping.
Koetzle said the only portion of the budget the town has some control over is wages. He will not include raises in the 2013 budget because the town can’t afford it — not that people don’t deserve it.
Anther issue is the town’s need to invest more in paving and equipment. Also, Koetzle wants to use $650,000 of fund balance this year, which is down from a high of $1.3 million a few years ago.
Koetzle has said he has whittled the tax increase from around 10 percent to the 7.5 percent range and is continuing to cut to get down below the 2 percent tax cap.
He will submit his proposed budget by Oct. 1, and the Town Board will review and make changes. The final budget will be adopted in November.
The current budget totals slightly more than $18 million, including all funds and special districts.