Should Schenectady city residents feel lucky, nay, grateful that their property taxes are proposed to increase only 4.18 percent instead of a potential 22 percent as indicated in next year’s budget proposal?
Well, if you read Mayor McCarthy’s executive summary, you would have thought that residents are the beneficiaries of some extraordinary budgeting.
Let’s look at the facts, though. Yes, the proposed budget keeps the total property tax levy under the state-mandated 2 percent cap. But with a couple of hundred households exiting the tax rolls this year, homeowners will bear the brunt of making up for that revenue loss, hence the reason individual property taxes will rise 4.18 percent.
Let’s also look at recent history. The city vastly overprojected property tax collection in its 2012 budget. And while some considered last year’s 1.89 percent property tax hike as minimal, nearly every city-issued user fee went up — from sewer, to paramedic services, to water. The city even came up with new types of miscellaneous fees, including a towing surcharge.
Much like last year, the city is at it again, even though McCarthy claims that he and his team tried to budget in a conservative manner this time around. The 2013 proposed budget projects increases in revenue for a majority of the 37 user fees in its general fund. This includes a nearly $300,000 increase in revenues gained from rental certificate fees, and a $20 fee hike per household in garbage collection.
So while the city mainly depends on property and sales tax revenue to fund its budget, it is becoming more and more dependent on user fees, which, at its current growth rate, will no longer be just an afterthought. And don’t let anyone fool you — the act of increasing or creating new user fees to keep property taxes low is like putting lipstick on a pig. Either way, residents are going to suffer.
That being said, it would be far too easy to place the blame strictly on McCarthy and the City Council. While there is plenty to go around between them, slow economic growth and staggering unemployment have been two of the main contributors to the city’s financial fiasco.
According to the U.S. Bureau of Labor Statistics, the city has a 10.1 percent unemployment rate as of Sept. 1. That means one out of every 10 residents who are eligible for work have no job. If that doesn’t seem like many to you, think again. More than 3,000 eligible workers are unemployed and living in the city.
Even if only a tenth of them are homeowners, the loss of revenue from that number of taxpayers can be crushing to a city so dependent on them. It’s no wonder tax revenue is low and the city, despite public dismay, brokered a sales tax revenue deal with the county. In these difficult economic times, having a guaranteed revenue stream is important.
As a resident, you do want the city to be conservative with its revenue projections, but at the same time you want to feel a sense of optimism. You want to envision a brighter future, and that’s just not happening for the city, especially when it continues to accumulate budget deficits every year.
With a weakening revenue stream, austerity should be a focal point. And from the looks of McCarthy’s proposed budget, the city is in fact making difficult decisions in order to reduce costs, including potentially not paying a $1.5 million county tax bill consisting of unpaid county taxes by city property owners. But despite all of that, taxes and user fees will increase. What the city needs is another revenue stream. Enter Metroplex.
With $7.1 million heading its way next year, Metroplex is a well-oiled machine. Its long-term goal is to enhance the economic and social vitality of Schenectady County, which includes residents and taxing jurisdictions. However, census data indicate that residents of the city are worse off than they were a decade ago. Unemployment, poverty and crime are all up.
Furthermore, the Schenectady County Legislature just passed an amended budget that includes a 5.9 percent tax levy increase of its own. Not to mention that the city has been dealing with deficits and budgetary shortcomings for years, as well as a recent cut in its credit rating.
With the county and city unable to fund their budgets without increasing property taxes and user fees, maybe it’s time for them to decide what is more important.
Is it more important that Metroplex continue to bring in small businesses such as restaurants, fund additions to existing businesses, and improve infrastructure in a primarily commercial district?
Or is it more important for the county and city (along with the towns) to take the revenue given to Metroplex and put it toward their budgets in order improve the lives of residents by giving them quality services and lower taxes?
Metroplex has done a lot of good, but if you want to improve economic and social vitality, you must bring in the jobs and clean up neighborhoods. That just hasn’t happened with the type of businesses that Metroplex is attracting and the way it goes about revitalizing its service district.
Bottom line — you can’t enhance economic and social vitality if you forget about the people you are trying to help. The county and city need to have an honest discussion about the future of Metroplex and the future of Schenectady.
Robert Caracciolo lives in Schenectady and is a regular contributor to the Sunday Opinion section.