The Fulton County Board of Supervisors on Monday night adop-ted an $88.8 million budget that uses nearly half of the county’s reserve funds to hold the property tax levy increase within the state-mandated cap.
The board will use $3.3 million of the fund balance to lower the 2013 levy to $28.4 million, a 2.4 percent increase from 2012. At the start of the budget process, the proposal called for a 15 percent tax levy increase.
The 2013 budget is $4.4 million less than the 2012 budget but nonetheless carries a 1.4 percent increase in the average tax rate for the county. As adopted, residents in the county will pay an average tax rate of $11.73 per $1,000 assessed valuation. Tax rates for each municipality vary considerably based on how accurate their property assessments are.
The 2012 budget carried a 6.37 percent increase in the property tax levy. The board used $1.5 million in fund balance — unspent money from previous tax years — for the 2012 budget. It used approximately $5.5 million of the fund balance for the $100.1 million 2011 budget, which carried a tax levy of $26.1 million.
The board’s Finance Committee several weeks ago agreed to spend $1.5 million of the fund balance to lower the levy. The full board Monday spent another $1.8 million to bring the levy down further.
The county’s fund balance now stands at $4.8 million, which is below the level recommended by the state Comptroller’s Office.
Fulton County Administrative Officer Jon Stead said the state recommends counties keep a fund balance equal to 10 percent of their general operating budget, to cover unexpected expenses and soften big jumps in the property tax rate. In Fulton County’s case, the 10 percent would equal $9 million.
County Treasurer J. Terry Blodgett said the county ended 2011 with a fund balance of $10.9 million. With adjustments, the county entered the 2013 budget cycle with approximately $8 million in the account.
The adjustments include the provision for the county to reimburse three school districts for property taxes not paid to them by the Hudson River-Black River Regulating District.
The district has defaulted the past several years on its taxes after it lost a court decision on how it could assess fees for flood control protection. Its latest funding mechanism is facing court challenges.
Several supervisors said the use of so much fund balance for 2013 will put the county in a precarious financial situation in coming years. Bleecker Supervisor David Howard was especially blunt. “I have been a fund balance hawk and these numbers scare me,” he said. “This is getting into ‘yellow line’ territory,” he said.
Northampton Supervisor Linda Kemper was also critical of using too much of the fund balance. “Is this a comfortable figure, or will this be suicidal?” she asked Blodgett.
Blodgett demurred, saying the county’s fund balance “is better than some and worse than others. But thank God we have it now.”
He said Fulton County is better off than other counties in that it has no debt and “we may have to resort to that and borrow.” Howard said he would oppose any attempt to borrow money for general operations.
Other supervisors said the use of the fund balance was appropriate to lower taxes for residents. “The fund balance belongs to the public,” said John Callery, Ward 3 supervisor for the city of Johnstown. “Thank the Lord, we have it. We are in a crisis,” he said.
Richard Ottalagano, Ward 6 supervisor from the city of Gloversville, said the board was “making the right decision” and was “moving in the right direction” by tapping the fund balance to lower the levy.
At two public hearings Monday prior to the board’s adoption of the budget later in the evening, seven people spoke in opposition to tax increases.
David Huckans of Broadalbin told the board to cut staff in programs not mandated by the state. “It is not enough to just lose jobs through attrition. We have to make cuts and sacrifices,” he said.
Stead said the county has made sacrifices and has reduced its staff by more than 35 percent over the past four years.
Barbara Heide of Bleecker said she appreciated the “work you guys do. However, year after year we can’t continue to raise and neglect the governor’s tax cap.”
She said in a “year or so, I will relocate from this area because I cannot afford to live here on my ridiculous salary. If I leave and my children leave, we will be seeing ghost towns around here.”