MAHOPAC, N.Y.— The tentative 2018 town budget presented by Supervisor Ken Schmitt last week calls for a 0 percent increase in the tax rate.
The $44.2 million spending package—$28.5 million of which belongs to the highway and general budgets and approximately $15 million to special districts such as water, sewer and fire—also stayed under the state-mandated property tax levy cap.
“The budget is based on months of preparation and collaboration between myself, town comptroller Mary Ann Maxwell, the managers of the various town departments, as well as other elected officials,” Schmitt said in his budget message. “[Maxwell] and I worked for many days and hours examining every single line item in the budget.”
The state’s tax cap law requires that a tax levy increase (the amount of money collected by taxes) cannot exceed 2 percent or the rate of inflation, whichever is lowest. The rate of inflation—and this year’s tax cap—is 1.84 percent.
“I am pleased to report to you that my [tentative budget] achieves this mandate,” Schmitt said.
Last year’s tax cap was .68 percent.
“So, we did have a little bit more room to work with this year,” Maxwell said.
Maxwell explained that due to a retired capital debt from 2015, the town was able to carry over $519,630 from last year’s budget. The maximum allowable levy in dollars had been $753,883, but the town was allowed to add the $591,630 for a total allowable tax levy increase of slightly more than $1.2 million. The 2018 tentative levy increase is $927,941, keeping it under the $1.2 million tax cap by $327,572.
Schmitt said it was the first time in his tenure as supervisor that the town was able to achieve a 0 percent increase in the tax rate.
“We were able to accomplish something I haven’t been able to do in nine years,” he said. “When I started, we were in a difficult economic recession and we had some rough budget years.”
For the average homeowner whose property is assessed at $347,000, the townwide 2018 tentative budget (general and highway) would call for a tax payment of approximately $1,711, which is a zero-dollar increase from last year, according to Maxwell.
Maxwell said the biggest expenditures in this year’s proposed budget are, as usual, employee compensation and health benefit costs. Of the $28.5 million in townwide expenditures (excluding special districts), $20.5 million is budgeted for those costs—approximately 71.9 percent of total expenditures.
Some of the budget drivers and highlights for the 2018 tentative budget, as laid out by Maxwell, include:
• Health insurance costs have risen as much as 12 percent.
• Salaries/benefits increased as a result of PBA and Lieutenants Union contract settlements. Two new full-time positions are being funded by the 2018 budget.
• Police overtime has increased by $100,000.
• Revenues have increased by 6.5 percent from last year, which helped keep the tax rate increase low. For example, employee health insurance contributions increased by $65,000, thanks to contract settlements; cable franchise fees increased $50,000.
• $70,000 is budgeted for technology upgrades and a fund has been established for a future purchase of data imaging equipment.
• $700,000 is budgeted for snow materials in the highway fund, the same as last year. The budget also calls for $150,000 for capital machinery in an attempt to avoid borrowing.
As part of the tentative budget presentation, Schmitt and Maxwell noted on Sept. 20 the town was reviewed by Moody’s Investors Service, which affirmed the town’s Aa1 rating.
“The review analyst noted that Carmel is very well-managed and finances are strong, which is expected of the Aa1 category,” Schmitt said in his budget message. “We are the only town in Putnam County to have that rating. We are very pleased with that.”
When the town was struggling in 2011 in the wake of the recession, it used a significant amount of its fund balance to keep taxes low, but that resulted in Moody’s giving it a “negative outlook.” Townwide fund balances deteriorated substantially from 2007 to 2011, Maxwell noted in her presentation, but then increased to a 10-year high by 2016 at $8.6 million, resulting in the Aa1 rating.
The tentative budget will now be examined by the Town Board, which can recommend tweaks and changes. At that point, the tentative budget becomes known as the preliminary budget, which is scheduled to be adopted at the board’s Oct. 18 meeting. A public hearing on the budget, including the contracts for the fire districts, is slated for Nov. 8. The board will then vote on the spending package at its Nov. 15 meeting. The state-imposed deadline for submission is Nov. 20.