NORTHAMPTON - Town Board members are working on a budget that would increase the tax levy by 1.6 percent, but will leave them under the $392,531 state-imposed cap on the tax levy.
The levy in the $1.9 million budget proposal for 2013 would go from $378,258 in 2012 to $384,458 next year - $8,073 under the tax cap.
During a meeting Thursday, board members said they are going to consider increasing taxes to put money in the fund balance for upcoming years.
Supervisor Linda Kemper estimates the fund balance is between $300,000 and $400,000.
"If we continue to draw out of our fund balance, we're going to be in trouble, because the economy isn't moving at all," Kemper said.
The rest of the board members were in agreement, but said they first wanted to see what amount the fund balance has been during the last five years.
"If we are indeed gnawing at the fund balance, then [we have to raise taxes]," Councilman Bob Ellsworth said.
Kemper and Councilman William Gritsavage also pointed out the town could lose more than $100,000 in sales tax revenue when the existing Walmart store in the town of Johnstown closes and relocates to a new Walmart Supercenter in Gloversville. The county's towns share sales tax revenue from town businesses, but not from city businesses.
Gritsavage said it's been great the town has been able to keep its taxes low, but at the same time, the town may be in fiscal danger.
"We're going to get hammered [financially] in two years, and people are going to be screaming," he said. "Unless there [is] some [relief from] state mandates, we're going to get hammered. We're putting the town in jeopardy because we've been good with taxes. 'What were we thinking back in 2012?' That's going to be the question."
The town also has a current tax rate of 92 cents per $1,000 of assessed value, which is expected to increase to 94 cents in 2013, but that also could change if the board adjusts the budget.
The Town Board will readdress the budget at its meeting Nov. 21.