By Jann Wiswall
Like a lot of communities in the region this year, Mansfield is facing the prospect of being forced to override the NYS tax cap in order to continue to provide essential services for its residents.
The tax cap is often referred to as a 2 percent tax cap, but in reality it will dip to 0.68 percent for the 2017 fiscal year, a drop from 0.73 percent in 2016, according to State Comptroller Thomas P. DiNapoli.
With barely more than half of one percent to work with, the Mansfield board is looking to cut as much as possible from its budget. But, as Town Supervisor Bob Keis explained, the entire budget for the town and highway department is only $1.1 million, and only a little over half of those revenues come from property taxes. A .68 percent tax increase would yield only $3,000 or $4,000 in new revenues.
“We are expecting some expenses to increase,” he said, citing likely increases in employee health insurance, worker’s compensation insurance, highway department materials, and other costs that are out of the town’s control. At the same time, the board is expecting to see lower revenues from sales taxes, mortgage taxes and other sources.
A bigger challenge, he explained, is the need to address the state’s assessment of the municipality as being fiscally stressed. This designation comes from the fact that the town does not have the recommended 15-20 percent of its budget in a fund balance (essentially a savings account). With a $1.1 million budget, this would mean having $165,000-$220,000 in the bank.
Mansfield currently has only about $10,000 in the fund balance.
The town’s low fund balance is due to a number of factors, most notably the 2012 highway barn fire, but also the fact that the town has kept its effective tax rate low in the hopes that new revenues would have been realized by now as a result of new property construction (and taxpayers) at HoliMont’s WestMont Ridge. That has not come to pass.
Keis said that, while he is waiting for actual 2017 expense estimates to come in, he sketched out a “What If” scenario for the board that presumed an unchanged total budget (the 2016 budget) with a goal of raising $100,000 for the fund balance.
In order to raise that amount, the tax rate would go from $4.73/thousand of assessed property value to $5.50/thousand.
For a property owner who does not get any special state exemptions (e.g. STAR or Senior STAR) and owns a home assessed at $100,000, this would mean a total 2017 tax increase of $77.
While that may not seem like a huge pill to take for most, it represents a 12 percent tax increase, which the board said would not be acceptable. Keis agreed, but pointed out that even a large percentage increase on a small amount (the current tax rate) doesn’t total a lot of revenue.
Keis also noted that Mansfield’s tax rate is one of the lowest in the county (most are more than double Mansfield’s rate) and has been for a dozen or more years.
The board agreed that the fund balance issue must be addressed for the sake of the future, but also agreed that a 12 percent increase is out of the question. Board members said they thought Keis should draft a budget that contributes a smaller amount to the fund balance in 2017 and continue growing it over the next several years.
“It’s important that we get to a debt-free situation with the budget,” said Keis. “We want to get to a point where we can pay cash for new equipment instead of having loans.”
He also added that the town has kept rates down for many years, but “things are changing and we’ve been too close to the wire every year.”
Keis promised to have a preliminary budget for the board’s review by the September meeting.
Before the board can decide whether or not to raise the tax rate, it must pass a local law allowing it to override the tax levy limit for fiscal year 2017. This does not require it to override the tax levy; it only gives the town that option. A public hearing on the matter will be held at the next regular town board meeting
At the same meeting, another public hearing will be held to allow public comment on the new Senior Citizen Tax Exemption which adds two income levels and exemption percentages to the existing County program.
Both hearings will be held at the start of the Monday, Sept. 19 board meeting, which begins at 7 p.m. in the Eddyville town hall.