The loss of taxable property and other revenues that go with it may impact the village of Schoharie budget year that starts June 1, and the village is preparing for the worst.
A public hearing is scheduled for tonight so the village can override the state’s 2 percent property tax cap, a measure Mayor John Borst said may or may not be necessary.
The village’s fiscal year ends May 31 and a tentative budget, due March 20, is under development.
The village set the stage for a tax-cap override before putting the current $975,434 budget together for 2012-13 but it turned out to be unnecessary.
“It was a very, very cloudy picture,” Borst said Monday.
That budget kept the village property tax rate unchanged at $5.62 per $1,000 in assessed value.
Property tax revenue in 2011-2012 fiscal year was $220,405. They were budgeted the same for 2012-2013.
Borst said the March 2012 retirement of former Police Chief Harold Orelup yielded a significant cut in operating expenses.
Now, a domino effect is playing out as the magnitude of property losses from 2011’s severe floods is realized.
“We know that we’re going to be losing 42 percent of our tax base. That’s gone,” Borst said.
Other revenues will follow the loss of homes and people, including franchise fees from cable television providers. The franchise fees dropped from $15,538 the year before the floods to about $9,000 after.
Also likely to drop is a utility tax based on electrical usage, which now yields $16,000 a year.
The village is also expecting to lose a healthy portion of sales tax revenue — about 21 percent — that’s shared by Schoharie County. The village received about $26,000 in sales tax revenues a year before the floods.
As rebuilding moves along, Borst said many properties are being purchased. He said that reflects investments on the part of some who intend to fix the buildings up but don’t have time right now to do so — so their assessed values remain low.
Despite the challenges, Borst said he and the Village Board take a conservative approach to budgeting and keep other taxes in mind at the same time.
“Everybody is very tax-conscious. There’s school taxes, county, town, everybody’s paying taxes, I look at the whole picture here,” he said. “We’re looking for ways to reduce costs, and I think we still have a bit of wiggle room.”
The public hearing on the tax cap override will take place at 7 this evening in the Village Office at 300 Main St.