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Scotia village trustees weigh cutting 2014-2015 budget

Thursday, March 27, 2014
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— Scotia trustees are debating whether to trim a tentative $8.64 million budget for the 2014-15 fiscal year so that the village stays under the state tax cap.

The village, whose fiscal year begins June 1, already passed a local law earlier this year to give itself the authority to exceed the tax cap if it so wishes. The 2011 state law limits the annual growth of property taxes levied by local governments to 2 percent or the rate of inflation, whichever is less. This year, inflation has brought Scotia’s cap down to 1.48 percent. The tentative budget would raise the tax levy 1.82 percent, though.

“I don’t think we could do 1.48 percent, to be honest,” said Village Mayor Kris Kastberg. “We would be out of business. It’s ridiculous.”

If the budget is approved, the tax rate would increase 1.6 percent from $12.01 per $1,000 of assessed valuation to $12.2 per $1,000 of assessed valuation. The average resident with a home assessed at $125,000 would see his village taxes increase about $24 to $1,525.

The tentative budget has set aside $6.64 million in the general fund, which pays for the day-to-day operations of the village. This is up slightly from the $6.62 million set aside last year. The water fund would increase about $35,000 to $793,434. The sewer fund would decrease about $100,000 to $1.21 million.

The budget would use $275,000 from the village surplus, which would bring the village’s rainy day funds down to about $1 million. Each year, the village hopes a conservative year will allow it to roll back at least some of these funds into the surplus. Last year, the village ended up rolling back $100,00 of the $375,000 in surplus funds it had budgeted from the reserves.

“My goal was to not use as much of the fund balance as we did last year,” said Kastberg.

Scotia has always been pretty adamant about not being restricted by the state tax cap, ever since it was first adopted in 2011. Each year, before budget season kicks off, the village trustees vote to give themselves the authority to override the cap. In the first year of the cap, the village adopted a budget that stayed within the cap. Last year, the village adopted a budget that exceeded the cap with a 2.7 percent levy hike.

In the last two years, the village was allowed to raise the tax levy up to the cap and then some in the amount of a pension exclusion granted by the state. But that exclusion was cut entirely this year — an “insidious” move by the state, Kastberg previously said, since the village’s pension costs keep rising.

“Each department presents their operating budget to me and then I go through them and take anything I think might be fat that could be trimmed and I trim it,” he said. “Anything I can do to make the operation of the village leaner, I try to do. But I try not to do it with the tax cap in mind.”

The village will hold a public hearing on the tentative budget April 9. A final budget must be adopted by April 30.

 
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