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Scotia again considering exceeding state tax cap

Monday, January 14, 2013
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— The village of Scotia is once again considering exceeding the state’s property tax cap.

The Board of Trustees last week proposed a local law to exceed the cap and will hold a public hearing and possible adoption at 7 p.m. Feb. 13 at Village Hall.

Although it is referred to as a 2 percent cap, the exact amount varies by school district or municipality because of a series of exemptions, including growth in taxable property and retirement costs above a certain amount.

Mayor Kris Kastberg said he considers the cap to be an arbitrary number that state legislators pulled out of their hat to get approval for rent control downstate.

“I’m not going to be governed by a set of legislators that have never set foot in the village of Scotia,” he said.

Kastberg said this measure also gives the village flexibility in developing its budget if it needs to exceed the cap.

“It’s basically to protect ourselves,” he said.

The board last year voted to give itself the ability to override the tax cap but ended up not doing so. Village officials trimmed the budget around the edges, including cutting funding for the Memorial Day parades and Freedom Park events, delaying purchases until the following year and tapping $300,000 from the surplus. There were no layoffs.

However, Kastberg said the picture is even bleaker for the 2013-2014 budget, for the fiscal year that begins June 1.

“We’re going to have to cut deeper than what we cut last year,” he said.

“We’re precariously close to looking at cutting services.”

It is difficult to make budget projections right now, Kastberg said, because the village doesn’t not have an accurate picture of what the revenue will be.

Scotia is still facing rising costs for health insurance and retirement benefits. Kastberg estimated that the village’s fixed costs for salary and other contractual obligations will increase by $185,000 in its general fund budget, which currently stands at a little more than $5 million.

The entire 2012-2013 budget is roughly $8.4 million with sewer, water and other special districts included.

The vote was 4-0 in favor of the local law with Trustee Thomas Gifford excused.

Deputy Major Joe Rizzo agreed that having the authority to exceed the tax cap is more of a fail safe. He said it is too early to tell whether the village will have to exceed the cap because the department heads haven’t submitted their proposed budgets.

New Trustee John Lockwood said he doesn’t believe the village will definitely have to exceed the cap, but now it will at least have the option.

“I think it’s responsible of us to at least plan ahead just in case something happens,” he said.

It requires 60 percent of board members for municipalities to exceed the tax cap, which in this case would mean three board members would have to vote in favor if it came to that.

Village officials are also looking at the revenue picture. Kastberg said Building Inspector Luis Aguero prompted a review of all the fees being charged when he asked for an increase in the building permit fees.

“We were charging less in fees than it cost us to go in and do the inspection,” Kastberg said.

The mayor also wants to look at how much the village is charging for people to use its parks. The vast majority of users are not Scotia residents, according to Kastberg, but they are paying the same rate as residents. He suggested implementing a two-tiered rate schedule.

But he wants to review all the fees at the same time.

“If we’re going to do a revision of the fee schedule, I’d like to do it in one fell swoop than rather than piecemeal,” he said.

 
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