PLATTSBURGH — The proposed City of Plattsburgh budget for 2013 appears palatable for taxpayers, but the future looks grim, the mayor says.
“Very simply, the taxpayers of this community are the top priority, and if we are going to continue with affordable tax rates in the future, we will need help from everybody involved,” said Mayor Donald Kasprzak, who released his budget proposal on Oct. 1, as per the City Charter requirement.
LEVY UP 1.9 PERCENT
His plan shows a tax-levy increase of 1.93 percent. The tax rate will stay the same as the 2012 rate of $10.40 per $1,000 of assessed property value.
The tax levy is the difference between the government’s total expenses and total revenues, the remainder having to be raised by property taxes. Tax bills fluctuate with assessments, so the levy is usually the better determinant of individual tax bills.
There are no planned increases for utility rates in 2013.
Drastic increases in pension costs for retired employees and employee health-care premiums were once again a problem for the city.
The 2013 obligation for pension payments is $3,462,280. In 2009, it was $1.2 million, and in 2000, the city paid just $17,700.
Health-care costs are expected to go up about 6.5 percent from $6.3 million for 2012 to about $6.7 million for 2013.
“If the retirement and health-care costs continue to increase and we have no meaningful reform from Albany, we will most likely use the rest of our fund balance, and there could be significant tax and utility increases next year,” Kasprzak said.
FUND BALANCE HIT
To deal with the rising costs this year, Kasprzak used about $2 million of the city’s $4 million fund balance. He also took about $100,000 out of the $350,000 contingency fund.
Overtime pay for most departments was cut sharply, but no layoffs are projected.
“There is no question, however, that foreseeable budgets beginning in 2014 will include substantial tax and utility increases due to the rising costs I previously mentioned (pension and health care),” Kasprzak said.
“Future budgets will be the most difficult yet for the city and will result in possible reductions in service and personnel.”
The city has been negotiating contracts with the Fire Department union and the largest union, the American Federation of State County and Municipal Employees, and will soon take up talks with the Police Department and Municipal Lighting Department unions.
“All of these factors will also have a direct impact on next year’s budget,” the mayor said.
The state enacted a tax-cap formula last year based on a 2-percent maximum increase. The formula includes exceptions for taxable property growth, pension increases, a carryover of up to 1.5 percent of unused tax levy from the previous year, and payments in lieu of taxes.
Under the formula, the city’s maximum tax-levy increase could have been about 5.4 percent.
The Common Council will have until mid-January to finalize the budget. Weekly budget sessions will be held beginning in the next few weeks. Those are open to the public.
One item surely to be discussed is the Plattsburgh Public Library budget. Late last year, during a fiscal crisis, the city agreed to add $60,000 to the library budget in exchange for some concessions from workers.
The mayor’s budget does not include the $60,000 for 2013 and provides $811,000 for 2013, the same amount as the 2011 library budget.
The library is governed by a Board of Directors but funded by the city, according to the charter.
Councilor James Calnon (I-Ward 4), who as mayor pro tem serves as the council’s budget officer, said the library budget, like every department, will be looked at closely.
“There are a lot of details that we have to look at, and we will take a long look at the library budget,” Calnon said.
Calnon said the mayor’s budget is a good starting point.
“But I get nervous whenever we spend down the fund balance like that,” he said.
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