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Montgomery County supervisors plan to cut tax levy

County treasurer criticizes move by lame-duck board

Thursday, December 5, 2013
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— Montgomery County’s town and city ward supervisors plan to use their final days in power to lower the tax burden on county residents.

In a budget meeting Tuesday night, the Board of Supervisors voted to pull an extra $1.5 million from county savings to lower next year’s tax levy roughly 3.4 percent. That’s a significant drop, said County Treasurer Shawn Bowerman, and he isn’t happy about it.

“It was an irresponsible decision,” he said, “especially when we’re fresh off a state audit that criticized us for doing just this sort of thing.”

The state Comptroller’s Office in October released an audit saying the county was on the brink of financial stress. The main problem, it said, was a recent decline in fund balance, the county’s rainy day fund. Over the last few years, in an effort to keep taxes low, the board spent more than half of a fund balance that once stood at $19 million.

Bowerman said the fund balance is currently slightly more than $7 million. Following the audit, he drafted a tentative 2014 budget that cut certain department spending, raised the tax levy by roughly 2 percent and still required $2.3 million from the fund balance.

At the time, he said even that was too much to pull from savings. With the board’s modifications to his tentative budget, the county is projected to use nearly $4 million in savings over the coming year. If the year goes according to plan, savings will shrink by more than half.

“We hamstrung the Legislature,” said Amsterdam town Supervisor Tom DiMezza, referring to the county’s new form of government, which takes over at the beginning of the year.

DiMezza and 2nd District Legislator-elect Tom Quackenbush were the only two current supervisors to vote against lowering the tax levy.

Board chairman and Root town Supervisor John Thayer said the majority moved money from the fund balance to avoid over-taxing. Town of Glen and Florida residents would have seen large tax increases under Bowerman’s tentative budget.

“The fund balance always replenishes itself,” he said. “We usually don’t spend as much as we budget. There are too many variables to budget precisely.”

He said the decision was for the benefit of taxpayers. Quackenbush said it was careless.

“None of them will have to deal with this,” he said. “I’m going to have to deal with this.”

The current board of 15 town and city ward supervisors will cease to exist in less than a month. On Jan. 1, a new, nine-member Legislature and county executive, elected in November, will step into office.

Quackenbush and current Amsterdam 4th Ward Supervisor Barbara Wheeler are the only ones to make the leap from old government to new.

Wheeler voted to pull from the fund balance, but Quackenbush said the move will hurt the new Legislature.

“I’m not against lowering taxes,” he said, “but we just got a scathing audit from the state telling us not to do what we just did.”

The current budget comes in at more than $100 million, according to Bowerman. DiMezza said a county should maintain at least 10 percent of a year’s budget in savings to avoid going broke in an emergency.

“We should have $10 million,” he said. “By the end of next year, the Legislature will only have three.”

Tuesday night, the board also reinstated a number of line items Bowerman previously cut.

It allocated funding for two new sheriff’s deputies, along with money for the Office for the Aging and Soil and Water Conservation.

Those items, along with the dwindling fund balance, didn’t concern Bowerman as much as the diminished tax levy.

Aside from the simple mathematics of revenue and spending, he said the state’s tax levy cap will lock the county into lower taxes.

“They limit tax increases from one year to the next,” he said, “so the new Legislature will have to correct this cut incrementally over years.”

County Executive-elect Matt Ossenfort, who will function as the county budget officer starting the first of the year, said he and the Legislature will deal with finances as the board leaves them.

“We’ll collaborate, and we’ll be able to make it work,” he said.

A public hearing on the budget is scheduled for Dec. 17, after which it is expected to be passed.

 
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