A state-wide law signed by Gov. Andrew Cuomo could provide a difficult twist for the village budget planning in Central New York.
Villages will be the first to see the effects of the 2 percent tax cap signed last year by Cuomo. The law mandates that the adopted budget for 2012 in towns, and 2012-13 for villages, cannot mandate a tax levy increase of more than 2 percent. An override is available to create a local law allowing an increase of more than 2 percent, but that stipulation can only be signed into law with a 60 percent vote of the village board.
After seeing many local towns override the law, including Manlius and Elbridge, village officials have learned from the towns’ experiences in November.
“The problem is this is a new program right out of the box,” said Dick Donovan, village of Minoa mayor and president of the Onondaga County Mayor’s Association. “Basically, if we override, then at least we protect ourselves from penalty. Of course, the public is going to think we’re all just ignoring the deal and not in support of a tax cap, when in fact we all are. We keep getting unfunded mandates and with a cap on your ability to raise revenue, you know, it just puts everybody in a box that is very tough to survive in.”
Should the adopted budget vary from the actual budget, resulting in a tax hike of more than 2 percent, the municipality would be responsible for a host of fines for violating the governor’s tax cap.
“The first year is going to be a learning process,” said Danny Liedka, East Syracuse mayor. “A lot of the numbers we put into the budget are state numbers and are estimated. We never get solid numbers that coincide with the state. It’s a couple dollars here, a couple dollars there. That could push us over the cap.”
East Syracuse plans to override the tax cap after a public hearing on the matter is held Jan. 9. Though the village plans to override the cap, that’s not an indication the taxes may increase more than 2 percent, Liedka said.
“My intention is not to raise taxes,” he said. “This is more of a formality to protect us against these estimated numbers. It’s really just to cover ourselves and the variables that we have no control over. It’s not giving us a free pass to raise taxes.”
Other villages are looking at numbers to see how the cap may affect their budget planning.
“We’re going to first study the formula that the state gives us. We have to finish that formula before we even consider an override,” said Fayetteville Mayor Mark Olson. “The only reason that we would have to override the tax cap is if costs that are out of our control pushes us over the tax cap.”
Donovan is also recommending to village of Minoa trustees to override the tax cap, as a precaution.
“It’s very complicated and essentially by overriding we’re actually protecting ourselves from civil penalties,” he said.
Olson and Donovan agree the biggest costs associated with the budgets, year-after-year, remain unfunded mandates.
“In theory the law is a good idea, but it didn’t come with mandate relief,” Olson said. “If we can get a 2 percent tax cap with mandate relief, I think that would be great.”
Village budgets are finalized in the spring; all towns presented a final, adopted budget to the state the last week of November.
