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.
The village of Marcellus intends to override the tax cap, though numbers for their budgets may not be available until March. Village treasurer Nino Provvidenti said the tax cap override would likely be implemented “to protect” the village.
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.
“Basically, if we override, then at least we protect ourselves from penalty,” Donovan said. “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, it just puts everybody in a box that is very tough to survive.”
The budgets are created off of a formula provided by the state. Many of the amounts that villages will have to deal with — like pension and health care costs — are not always available until after budgets are adopted.
Villages are expected to begin the budget process, with the thick of the budget season entering in March.
