Meanwhile, county officials are trying to get taxpayers to look beyond the tax levy and focus on the actual tax rate.
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Higher taxes, jobs cuts and fewer services are all on the table as Essex County prepares its 2013 budget. Lawmakers are already facing a $13 million budget gap, and an override of the state-imposed tax cap already looks a very real possibility.
Jay town Supervisor Randy Douglas chairs the county’s Board of Supervisors.
“At this point, it doesn’t look pretty,” he said. “We have a $10 million fund balance, and we lowered it down from $21 million,”Douglas said. “And the tax cap override? It certainly does look like it’s going to be likely that it’s going to happen. We have to do something. I’m not sure how much of an increase there will be. We’ve used fund balance for years. We had seven years where we went zero-percent increase. You have two choices: Cut services or raise taxes.”
Forces beyond the county’s control are driving many of the budget shortfalls. County Manager Dan Palmer says health insurance costs have gone up by 15 percent, and the county’s share for retirement costs has increased from 8.9 percent seven years ago to more than 20 percent next year.
Palmer says past use of the county’s fund balance to keep the tax levy flat has caught up with lawmakers. With a total fund balance of about $10 million, he says the county can’t risk using it to keep the tax levy low next year.
“Irrespective of how much we go up, we’re still the lowest tax around,” he said.
Essex County’s tax rate of about $2.40 per $1,000 of assessed value is lower than the tax rate in Franklin and Clinton counties, both of which face much lower potential tax levy increases in 2013.
Palmer says Essex County will have to take a long-term approach to balancing its budget. He says a three-year plan is needed.
“In other words, we’ve got to look at tax increases, and we’ve got to look at whatever cuts we could come up with, and ultimately get to the point where we’re not relying on 40 percent of our actual costs being covered by fund balance,” he said. “In 2006 – this is before me – 54 percent of our actual net costs was covered by fund balance. You just can’t do that. That’s the reality.”
The county will sell its Horace Nye Nursing Home to a company in the Bronx for about $4 million. The contract of sale is still being hammered out by attorneys, and Palmer says it could take much longer for the sale to become official.
“It takes anywhere from a year to 18 months to close the sale,” Palmer said, “because everything has to be approved through the (state) Department of Health. And then you have to impact negotiations with employees. It isn’t like you can say, “I sold it, and a month from now, I’m going to get my check.’ That’s not the way it works.”
Roby Politi is supervisor of the town ofNorth Elba.
“Everybody wants it to happen right away, but it doesn’t happen right away,” he saidNorth Elbatown Supervisor Roby Politi. It’s a lot like getting – although it’s not the same thing – if you ever apply for a liquor license. Do you know how long that takes? You can imagine how long it takes to get the approval to operate a nursing home.”
If the county got paid for the sale tomorrow, it would reduce the budget gap to $9 million. The county will eventually save $2 million to $3 million in annual operating fees when the sale is complete.