The Village of Lansing Trustees passed a $2,820,033 budget Monday, down by 9.39% from last year's budget. But taxpayers will pay 20 cents per thousand dollars of assessed property value more this year, an 18% rise in the tax rate. While that only means an additional $40 for the owner of a $200,000 house, the high percentage has raised some eyebrows. But Mayor Donald Hartill argues out that the adjustment will put the Village on a solid footing to maintain services and infrastructure maintenance at a sustainable level, and points out that the tax rate is lower than it was ten years ago.
"Several years ago I lowered the tax rate too much," Hartill told the Trustees at a public budget hearing Monday. "We were building up capital reserves. I then wanted to quit that so I lowered it. That was the year Mr. Cuomo decided to put on the tax cap. We're recovering from that. I want to get it back up to about the tax rate we had three or four years ago. That's the one we can sustain the level of service that we provide and not being too much into the reserve fund."
Municipalities eager to stay below the tax cap have found it difficult to adjust tax levels to changing needs because the formula for determining the allowed tax levy each year is based on the previous year's levy. The Village tax rate had already been declining when Governor Cuomo's so-called 2% tax cap was enacted in the 2012-13 fiscal year, the same year the Village tax rate reached 99 cents. It reached a low of 95 cents the following year, then creeped back up, little by little to $1.10 last year.
To put this in perspective, the Village tax rate was $3.85 when the Village was incorporated in 1976-77. Four years later it dropped to $1.57, then bounced between about $1.50 and $2.45. Since the 1991-92 fiscal year it has never gone above $1.80. Part of the budget puts money into capital reserves each year, and Hartill has managed to maintain the Village infrastructure by paying cash from these reserves, rather than incurring loans or bonds that would have added interest payments. The Village has been able to pay for its new Village hall, various DPW expenses, and infrastructure projects including large jobs like the $815,000 Triphammer Road repaving project that was completed last year.
The tax levy is determined by a complicated formula that starts with the previous year's levy amount, and often ends up being above 2%, though not by much. Each years municipalities have an opportunity to pass a law exempting themselves from the cap, and most municipalities do so as an insurance policy in case they later find they need to exceed the cap for some reason. This year, though, the Village meant it.
Hartill says that after over $1 million of road projects last year as well as other projects the Village has paid for, reserve levels are getting too low, except for the sewer reserve, which currently has just under $4 million. A sewer repair project is planned for the next fiscal year, as well as engineering for an expansion to unsewered areas of the Village. Hartill notes that these will also facilitate sewer expansion in the town of Lansing, allowing for a future capacity to flow through Village infrastructure to the sewer treatment plant in Cayuga Heights.
On top of that the Village will continue to improve the roads in the coming year, and Hartill says a number of aging water mains need to be replaced.
"We're also going to be doing a joint project with Cayuga Heights that will get us out of a bind that we have in the Highgate Circle area," he said. "It will be advantageous to both of us, which is a useful kind of collaboration. There is a significant amount of road work that's being done. That's the last big chunk of road work that we'll have. We're adding some machinery. It has a 10 to 15 year life, so this is a one shot deal."
The New York State Comptroller's Office frowns on taxing authorities that keep too much money on hand. The Lansing School District, for example, was called to task by a Comptroller's audit that accused the district of overtaxing, while district officials maintained they needed a larger cushion to insure against a possible mammoth tax rate hike if the Cayuga Power Plant were to close, something that is still uncertain. But Hartill admits he may have made a mistake in lowering the tax rate as much as he did. At the time reserve levels were getting too high, so lower tax rates were a way of giving the money back to taxpayers.
"The capital reserve was large," Hartill said Monday. "That attracts the attention of the auditors. We have a similar problem with the sewer fund, which we've been working on for a couple of years. If you don't have projects lined up to use those funds, you can get your fingers slapped."
Hartill says the $1.30 tax rate is the beginning of getting reserves back to a sustainable level so the money will be there when it is needed for future projects.
"At the end of this '17 - '18 fiscal year that we'll be actually in a position to start an equilibrium long-term program," he said. "It's always tricky to figure out exactly where you want to be, but given the current state of our infrastructure we're in pretty good shape."