Hit by insurance costs, $2M budget strains for tax rebates
RENSSELAERVILLE — In the final week of putting together a spending plan for 2015, town board members asked Supervisor Valerie Lounsbury to do what she could to keep the taxes below the state-set limit, qualifying residents for rebate checks.
The board unanimously adopted the budget on Nov. 18 with a tax-levy increase of 1.3 percent, brought down from nearly 4 percent with the use of extra money from the town’s fund balance and a reduction in emergency snow-removal funds.
The board plans to repeal a Nov. 13 local law overriding the tax cap, Lounsbury said Wednesday.
The $2.17 million spending plan is driven largely by increased costs for medical insurance and wage increases for highway workers as a result of a newly negotiated contract.
“The men had not had a raise in five years and they were given a 2-percent raise,” said Lounsbury, adding that the 36-cent increase is nearly a wash with the rate hike in medical insurance.
The 2011 state tax-cap law tightening the belts of municipal budgets has caused Rensselaerville to pass laws overriding the limit each year since as a precaution, even when the 2014 budget was kept within the cap. For 2013, the increase was over the cap.
The town tax rate per $1,000 of assessed value for 2012 was $7.71.
Repealing the override is a requirement in a separate state measure this year. Billed as a tax-freeze, it allows taxpayers to get rebate checks for the increase if their taxing entities keep increases to levies, or the revenue raised by taxes, under the cap.
Lounsbury acknowledged the town board felt the pressure of the state rebates.
“I think that they’re making it very difficult for towns who didn’t have excessive budgets to start with,” she said in an interview Wednesday.
The board held public hearings on the plan and a law overriding the tax cap on Nov. 6, when Lounsbury read one letter from a resident and two of the six residents who attended asked that the board reconsider the 4-percent increase.
Resident Diana Hinchcliff noted the town wouldn’t qualify for the rebate checks.
“We’re sorry. You still will be eligible for some rebates,” Lounsbury said at the hearing, noting residents could qualify under different levies, like those for schools and the county.
“We need to bring it back under 2 percent,” said Georgette Koenig, speaking of the levy increase, which she and Hinchcliff compared to lesser increases in Social Security.
Lounsbury said the use of the additional $10,000 in unexpended funds to lower the levy increase is not sustainable.
Expenses
The 2015 spending plan raises appropriations for the town — $954,057 for the general fund and $1,210,964 for the highway fund — by 3 percent.
The general fund saw the largest leap, with an additional $60,449. Of that amount, its appropriation for medical insurance was $56,000, or 35 percent, higher than 2014. In the highway fund, medical insurance costs increased $28,680, or 31 percent.
The town’s retirees who were hired before 2002, Lounsbury said, get their medical benefits paid fully by the town. Changes made to the contract were aimed at curbing the town’s costs for future retirees, she said.
The new contract allows for highway workers’ additional drug co-pay expenses to be reimbursed by the town by up to $400, Lounsbury said.
In the highway fund, additional increases came in the form of more road materials, fuel, and road machinery.
The general fund adds $1,250 to the $22,500 appropriation for the library, which Lounsbury said was made because of a reduction years ago, increased library use, and lower collections in its fundraisers.
More than $2,000 was cut from the building inspector’s account since he offered to take on the clerical work for half of what the town paid for a clerk, Lounsbury said during the public hearing.
Revenues
The $1,210,964 in revenues for the highway fund come from 63 percent in property taxes, 16.5 percent in sales tax shared by the county, 15 percent in funds from the state Consolidated Local Street and Highway Improvement Program (CHIPs), and 5.25 percent from unexpended funds.
The $954,057 in revenues for the general fund come mostly from 31.1 percent in taxes, 36.7 percent from sales taxes, and 23.2 percent from unexpended fund balance, with the rest from the town’s departments, donations, and state tax distributions.
For the town’s three fire companies and an ambulance squad, taxes dropped with savings in workers’ compensation insurance.