GLOVERSVILLE -- The Gloversville Common Council on Tuesday adopted the city's $18.91 million 2019 budget, which establishes the lowest tax rate the city has seen since the late 1990s.
The spending plan increases overall city spending, which is up $800,000 from the $17.8 million spent in the current year. It also cuts the city's total property tax levy by $250,000, from $7.9 million in 2018 to $7.65 million for 2019, and lowers the city's tax rate per $1,000 of assessed property value by 69 cents -- from $20.64 in the current year to $19.95 in 2019.
It also adds one job to the city's Department of Public Works.
Tammie Weiterschan, Gloversville's commissioner of finance, said the 2019 budget achieves the simultaneous spending increase and tax cut by using $1.6 million of the city's approximately $7 million fund balance, a reserve fund of unspent tax revenue. She said the move will leave the city with approximately $5.4 million in reserve funds when it starts its budget process next year.
The city is also projecting $4 million in sales tax revenue in 2019, up about $700,000 from 2018, and it is projected to get $567,000 in 2019 for its SMART Waters deal, by which it sells city water to other parts of Fulton County.
Mayor Dayton King said his policy has been to try to keep the city's tax rate flat or reduce it slightly. When he took office in 2010, his administration raised the city’s tax rate for the 2011 budget to $21.71 per $1,000 of assessed value, but it has cut the tax rate four times since then -- in 2014 ($21.31), 2016 ($21.06) 2017 ($20.64), and now to $19.95 for 2019.
"It's almost like a non-news issue, because people now expect it," King said. "Whereas almost every other community is raising taxes, they expect Gloversville to be flat or decreasing. When school districts are raising taxes, when the city of Johnstown is raising taxes, when the towns are raising taxes, we're lowering taxes. It's still too high, but we're going in the right direction."
Since 2000, Gloversville has only had a tax rate lower than $20 per $1,000 of assessed value five times, but each of those tax rates, when adjusted for inflation using the U.S. Bureau of Labor statistics inflation calculator, shows those rates were actually higher than $19.95.
In 2000, Gloversville had a tax rate of $16.82. Adjusted for inflation, that would be $25.20 in 2019. In 2009, the city implemented a total revaluation of its taxable properties, increasing the city's total assessed value by more than $100 million. The revaluation knocked the city's tax rate down to $18.46 per $1,000, which would equal $22.11 per thousand in 2019 dollars.
Councilman-at-large Vince DeSantis, who is also deputy mayor, said he believes the 2019 tax rate may be the lowest the city has had in nearly a quarter-century. He said credit is due to past members of the Common Council, going back to 2010, who implemented "austere" spending plans.
"The city was in a terrible financial situation in 2010," DeSantis said. "The city was talking about insolvency, and the city made some very hard choices and went through several years of austerity, helping us rebuild a fund balance, salting away money for a rainy day and only gradually decreasing the tax rate, which was very smart."
DeSantis said he's pleased the city was able invest in the following initiatives in the 2019 budget:
• $100,000 for a downtown Internet business marketing study. The city will look to reduce that cost through a matching grant.
• An increase in the city's share of funding for Gloversville Downtown Development Specialist Jennifer Jennings' position, from $25,000 to $50,000.
• $300,000 earmarked for a proposal to form a Glove Cities demolition team with the city of Johnstown and/or possibly Fulton County.
• $25,000 to help fund the Center for Regional Growth's downtown business incubator project.
King said Gloversville still faces a long-term fiscal crisis, as the cost of the city's personnel continues to go up every year and will eventually, within five to seven years, exhaust the city's reserve funds.
He said he advocates consolidating services, including police, fire and public works, with either the city of Johnstown or Fulton County as a long-term solution for the cost of government.
"The way that I've designed it, nobody currently employed would lose their jobs, but unfortunately, it won't happen until things get terrible in Johnstown, because people are comfortable," King said. "They'd rather complain on Facebook than run for office and make the hard decisions."
DeSantis said he believes the only answer for Gloversville is for it to increase its population and economy faster than the city's annual costs increase.
William Rowback Jr., an announced Republican candidate for mayor in the city's next election, said he believes the city needs to prioritize spending to help improve city services, including the police, staffing levels for the Fire Department and the city DPW. He said he's not against the tax decrease, but he fears a fiscal cliff has been created for the city in the near term that will require larger tax increases. He said he would rather see the city put its resources into better city services.
"We need more people for the city's DPW," he said.