CHENANGO COUNTY – Given a shortfall in sales tax revenue and a looming property tax cap that’s likely to be less than one-half of one percent, Chenango County’s financial interests for 2017 look a bit shaky, county officials say.
On Monday, Chenango County Treasurer William Craine updated the county Board of Supervisors on the county’s current fiscal standing, and warned of the obstacles Board members may face heading into the 2017 budgeting season.
News from the NYS Comptroller’s office suggests that the county may need to deal with an unprecedented property tax cap as low as one-tenth of one percent next year. Couple that with 2016 sales tax revenue that’s already one-half of 1 percent below projection, and it’s good reason to be vigilant, said Craine.
“We’re looking at a situation where we will have very little if any tax cap relief, and it appears as if we will have very little if any sales tax relief,” he said. “We have some heavy lifting to do here.”
Despite a cautious outlook for 2017, last year was reasonable for Chenango County. The County Board initially faced a possible deficit by the end of 2015; however, the county finished the year with a nearly half-million dollar surplus, thanks largely to the collection of outstanding property taxes (which reduced outstanding debts from $9 million to approximately $8 million) and another $2 million in surplus generated by the Department of Social Services.
“We have been able to run with a slight surplus this year. We made really good progress in 2015,” Craine said.
Even so, the county’s current financial position is keeping county reps watchful. Low fuel prices are bringing in less sales tax revenue than this time last year, and the pending 2017 tax cap may leave the county with enough wiggle room to raise only $100,000 in additional revenue for next year’s budget (whereas a 1 percent increase brings in about $850,000).
All in all, the county’s ability to adhere to the 2017 tax cap – at least at the moment – is questionable, said Craine.
“If I need to find $700,000 or $800,000 [for the next year’s budget], then usually by this time of year, I might have identified where I might find it,” said Craine. “Right now, I have only identified maybe $250,000 to $350,000 that I think we could go to. Could we be looking at $300,000 to $500,000 to close the gap to meet the tax cap? I think that’s about the type of number to expect, but I believe it might be a manageable number.”
“Our budget process doesn’t start until September or October, but it’s too late to think about this by then,” said County Board Chairman Lawrence Wilcox, Supervisor for the Town of Oxford. “Each one of our respective committees needs to keep this in mind – that we need to have a long-term plan.”
Chenango County has adhered to the property tax cap every year since it was enacted by Gov. Andrew Cuomo in 2012. The law requires that local governments and school districts raise taxes no more than 2 percent or the rate of inflation, whichever is less. Communities, however, have the option to raise or lower property taxes according to their needs. If taxpayers want to pay more taxes, they can override the cap with a 60 percent vote for schools and by a 60 percent vote of the governing body for local governments.
Adhering to the cap is one of the six financial precepts steering Chenango County’s 2016 budget. Other precepts include:
• Having a balanced budget using reasonable revenue and expense expectations
• Maintaining a NYS Comptroller’s rating of “not in fiscal stress”
• Remaining debt free
• Maintaining a minimum of $15 million in general fund surplus
• Over the course of the next four year, reducing the application of general fund surplus applied to the following year’s budget to $1.5 million.
Those same precepts will be used to build the 2017 budget, said Craine. With the tax cap being the only questionable factor at the moment, the county is on track to meeting all other precepts.