Scotia’s village Board of Trustees voted unanimously this week to pass a local law giving itself the authority to override the state-imposed property tax cap in the upcoming budget season.
The 2011 state law limits the annual growth of property taxes levied by local governments and school districts to 2 percent or the rate of inflation, whichever is less.
The village and many other municipalities across the state pass a similar law each year to give themselves more freedom when crafting a budget. Scotia passes this law early in the year, before budget season kicks off, for two reasons — as a matter of principle and so residents don’t worry that budget decisions are being made at the last minute, said Mayor Kris Kastberg.
The village’s fiscal year begins June 1, and as much as its leaders would like to stay under the tax cap in the 2014-15 budget, Kastberg said he’s not sure that’s possible given that the village’s cap this year is much less than 2 percent and that it can make no adjustments for retirement costs.
“I fully intend to make the cap this year,” he said, “but I am insulted that the state thinks they can wash all municipalities with the same brush and say we have to make this cap. My constituents have been very vocal that they want to keep our police department and fire department at full force. It’s nearly impossible to make this 2 percent because that 2 percent is already eaten up by employee costs.”
In the first two years of the cap, Scotia was allowed a levy increase of 2 percent. This year, though, mild inflation has brought the cap down to 1.48 percent for the village, or an increase of about $64,357.
In fiscal years 2012-13 and 2013-14, the village was also given pension exclusions of $50,566 and $21,314, respectively. This meant the village could have raised the tax levy by 2 percent plus the pension exclusion amount. This year, Scotia was given no pension exclusion.
“This year is insidious for us because we get no exclusion, yet our pension costs keep rising,” said Kastberg, “so the most we can raise our assessment by is $64,356.92. On a $5 million operating budget, that’s not a lot of money when you have pension costs, heating and salting costs from the winter, contractual obligations to three unions, and so on.”
Although the village voted to give itself the ability to override the cap in its first year, it still stayed under the cap by denying a $4,000 budget increase request from the village’s Business Improvement District. Last year, the village voted again to give itself the ability to override the cap, and later did so, adopting a budget with a 2.7 percent levy hike.
Kastberg said the village would have had to trim some of its summer programs to make the cap, but felt doing so would have been a disservice to residents who have come to expect those programs. Kastberg said that in his eight years of putting village budgets together, only once has a resident ever spoken out at a budget meeting to decry tax hikes.