Desperate for revenue to avoid a 10 percent property tax hike, Cobleskill Mayor Mark Galasso has come up with a seemingly perfect end-run to offset a budget shortfall: jack up water and sewer taxes, which the village’s otherwise-tax-exempt institutions, including SUNY-Cobleskill and Cobleskill Regional Hospital, have to pay, and skim $500,000 from their coffers to pay for general fund services like police protection. The strategy isn’t a great one, and not just because it may not be legal.
To make his proposal even more palatable to the homeowning faction in his village, Galasso would cut property taxes by 28 percent.
One problem, as Schoharie County finance chief William Cherry pointed out in Friday’s letter to the editor, is that the state has sent mixed messages regarding the use of water and sewer revenues for purposes other than water and sewer services: While one section of general municipal law appears to support the practice, at least pertaining to water revenues, the state comptroller has, on at least a few occasions, criticized it.
Indeed, it’s hard to imagine the state signing off on a scheme designed to circumvent the universally accepted — and reasonable — principle that not-for-profit institutions shouldn’t have to pay taxes. (And that’s not even taking the state’s 2 percent tax cap into account.)
If such a gambit were kosher, wouldn’t it have been tried by the likes of Albany Mayor Jerry Jennings, who has repeatedly blamed the city’s fiscal woes on its huge percentage of tax-exempt properties, or former Schenectady Mayor Brian Stratton, who continually browbeat tax-exempts to pay their “fair share”?
If the state were to allow this — and legal battles would hardly be surprising — efforts to similarly redistribute the property tax burden onto tax-exempts could be expected everywhere.
Instead, Galasso should balance his budget the honest, old-fashioned way, as other municipal executives do — making cuts and, if necessary, raising taxes.