Cobleskill Mayor Mark Galasso is proposing to tap into water revenues and spread costs out beyond just taxable properties in a $5.45 million tentative budget for 2013.
It’s a move he said will spread the cost of village services — particularly the those of the Police Department — out to nonprofits and others who benefit yet don’t pay property taxes.
Nonprofits affected would include SUNY Cobleskill, where a spokesperson recently said officials hope the village will consider the economic impact of the college’s 2,500 students and 500 staff members before making a decision.
Maintaining the same level of village services offered today would require a property tax increase of nearly 10 percent unless those changes are made, Galasso said.
“There’s no way you can go to taxpayers and say you’re going to raise taxes 10 percent, it’s not possible,” Galasso said.
Galasso is suggesting several cuts to bring the budget within the state’s tax cap.
Cuts being proposed total about $125,000 and include shrinking the codes enforcement position from full-time down to part-time and pursuing changes in employee health insurance.
The village would switch from a health savings account to a health reimbursement account, saving the village as much as $50,000 a year.
This change would offer employees “a little bit less,” Galasso said.
Another $20,000 would be freed up by putting only $15,000 into the Fire Department capital investment line instead of $35,000.
The department needs a new engine for a fire truck but that costs $400,000, he said.
“None of the cuts I’m proposing are due to the lack of need, they’re cuts of necessity from the point of view of the taxpayers,” Galasso said.
Under the plan, the village would boost water revenues by increasing rates and shift just over $535,000 from the water fund into the general fund — money that can replace some of the property tax that’s used to pay for services.
Galasso proposes to boost water rates from the current $6.58 per $1,000 gallons up to $11.01 per $1,000 gallons, an increase of about 67 percent.
The water rate increase would produce $1,452,734 in revenues compared with the current revenues of $919,773.
Sewer rates would rise by 26 percent under the proposal, with the rate increasing from $7.50 per $1,000 gallons to $9.45 per $1,000 gallons.
The sewer rate change will bring sewer revenues to $1.16 million compared with the current $884,500 in revenues.
The budget proposal buffers water and sewer rate hikes with a 28 percent cut in property taxes.
It calls for collecting $7.98 per $1,000 of assessed value compared with the current $11.08 per $1,000 of assessed value.
Instead of collecting the current $1,629,007 in property taxes, the village tax levy would drop to $1,183.504.
The half-million from the water fund would cover nearly half of the roughly $1.1 million Police Department budget, and spread the cost of that service to all who use water.
The state’s Constitution and state law govern the use of water and sewer revenues: Water revenue can be placed into the general fund, sewer revenue cannot.
As it stands now, nearly an entire half of the village is non-taxable property.
This includes SUNY-Cobleskill and Cobleskill Regional Hospital, two large nonprofit entities that don’t pay property taxes.
Galasso said an analysis of the Police Department’s call log shows a high percentage of calls related to students. Police are also called by the hospital for student related medical issues, he said.
“These are properties that are benefiting from the service without having to pay for it,” he said.
The proposal, if approved, would reduce the burden on taxpayers for taxes, water and sewer. A few, however, would see costs rise.
An outline of total costs for water, sewer and property taxes shows those with properties valued at up to $80,000 — which also fall into the “high” range of water and sewer usage — would see a $262 increase for a total of $2,274.
Those with property values up to $80,000 with medium water and sewer usage — all based on gallons of use — would see an increase of $71 for a total of $1,661.
Galasso said he believes few properties fit into these ranges.
“The vast, vast, vast majority of properties will see a reduction in the overall tax bill, doing what I’m doing,” Galasso said.
SUNY-Cobleskill spokesman Joel Smith said an increase in water charges would be difficult to absorb because the college is expecting a $600,000 decrease in aid next year.
The college pays roughly $500,000 for water and sewer services now, Smith said.
“The college is a multi-million dollar economic driver for the Cobleskill community and we hope they factor that into the decision making process,” Smith said.
Students using their “Coby Cash Card” spent about $180,000 last year in the village and another $70,000 making use of the Schoharie County transportation system’s buses, Smith said.
“It is our hope that prior to the hearing and before the final budget is adopted that the village will explore other ways to solve its budget challenges rather than placing additional stressors on the village’s leading economic engine,” Smith said.
The village will hear public comment on the budget proposal during its meeting that starts at 7 p.m. Tuesday, Nov. 13.