NORWICH – The Norwich Common Council has received the city’s 2015 tentative budget and, similar to many municipalities across the area, is looking to transcend the state mandated property tax cap levey.
A public hearing for the city’s pending financial plan is set for 6 p.m. Tuesday, Dec. 9 at the Council Chambers on Hubbard Avenue. Additionally, the Common Council will hear public comments on the motion to override the municipal tax cap law.
Facing a $521,000 decrease in revenue excluding property taxes in the last year, the $11.95 million budget floats a 5.39 percent tax rate increase, or about $21.30 per $1,000 assessed value. This means taxpayers with an average $55,000 property can expect to foot an extra $5 per month.
According to city administrators, the budget contends with escalating employee retirement contributions and a shortfall in state aid that negatively impact the general fund account. That account, which makes up approximately 80 percent the total budget, encompasses services including police, fire, EMS, and public works.
To help offset costs, the budget proposes $351,790 be applied from the city’s unreserved fund, leaving $181,900 in that account.
The city has seen an approximate $600,000 decrease in state aid in the last six years, in spite of paying more than $1 million or approximately one-tenth of the budget annually toward mandated retirement expenses. Regardless of increasing retirement costs (which rose 22.5 percent in 2010; 32.2 percent in 2011; and 34.6 percent in 2012), Mayor Joseph Maiurano noted the city has kept previous budgets under a 3 percent tax rate increase, preventing much of the burden from being shouldered by local taxpayers.
“We haven’t seen a big increase in the tax rate in recent years. Overall, I don’t think this is a bad budget,” said Maiurano. “There are some things that might be done in the future to alleviate some of the strain for 2016. Unfortunately, we do our budget before the New York State budget comes out, and we can’t speculate what state aid we will get ... If the state doesn’t come through, we know looking ahead that we’ll have to make adjustments for 2016 and still maintain services.”
The city also saw a less than expected gain in sales tax revenue in 2014. While sales tax revenue for the year was budgeted at $1.55 million, less than $1.53 million is expected by Dec. 31.
“That has a big impact on our budget compared to the county’s,” explained City Finance Director William Roberts. “We’re often asked why we can’t stay under the tax cap and the county can, and it’s mainly because we don’t have the same level of revenues. We’re boxed to what’s inside the city.”
While the 2015 budget calls for an increase in the general fund, taxpayers will see a decrease in the water fund of approximately $224,250, and a decrease in the wastewater fund of approximately $248,460. Debt services is also decreasing by approximately $22,680 while special grants is increasing by approximately $89,000.