GLOVERSVILLE — The Common Council on Tuesday approved the $18.08 million 2021 city budget that keeps property taxes flat while maintaining services at their current levels.
The 2021 city budget totals approximately $18.08 million, down just over 3 percent from the current year’s $18.71 million budget. The budget includes anticipated revenues estimated at $16.48 million to be balanced by a $1.6 million fund balance allocation. The current year’s budget featured revenues estimated at $17.14 million and anticipated the use of $1.56 million from the city fund balance.
The anticipated reduction in revenue next year is largely due to an expected 20 percent reduction in state aid to the city. The state announced earlier this year that localities should expect a 20 percent reduction in aid this year rolling into next year due to the economic impacts of the coronavirus. The mid-year reduction will result in a $460,000 loss in Aid and Incentives for Municipalities funding to the city when it is disbursed for this year in December. The 2021 budget includes an anticipated 20 percent AIM funding reduction.
Anticipated sales tax revenues in the budget are projected to remain flat from this year’s budget at $3.8 million as these revenues for the second and third quarter of this year met or exceeded anticipated levels despite concerns that the coronavirus would lead to losses after the first two months of each quarter fell below expectations before rebounding in the final month when the state reconciled the received sales tax returns.
The budget maintains the city property tax rate at the current year’s level of $19.95 per $1,000 of assessed value bringing the total tax levy to approximately $7.58 million.
The budget maintains city services at their current levels and does not include any staffing cuts, although any vacancies that occur through staff departures or retirements may be left vacant unless refilling the position is immediately necessary to continue normal operations.
The only position that was fully cut from the 2021 budget is the secretary to the mayor, a position that was left open following its vacancy earlier this year. City Clerk Jennifer Mazur has since been covering some duties related to that position and answering incoming calls to the mayor’s office.
Spending reductions from this year to next year came out of meetings by the Common Council with department heads where budget requests were reviewed and revised.
The Common Council unanimously approved the adoption of the $18.08 million 2021 city budget and a resolution adopting the $19.95 per $1,000 of assessed value tax rate despite a brief disagreement before the legislation was taken up when Councilman-at-Large William Rowback Jr. motioned to modify the budget to increase the included fund balance allocation by $100,000 to reduce the tax levy and therefore provide residents a modest tax break.
A second to the motion was required before the council members could discuss the unscripted action and was provided by 4th Ward Councilwoman Ellen Anadio. Rowback subsequently explained his interest in increasing the fund balance allocation to provide taxpayers “going through COVID-19” a tax break.
“It would be a advantage for our residents to lower the tax rate,” said Rowback.
Rowback estimated that the application of $100,000 to the total tax levy would reduce the tax rate by approximately $0.24 per $1,000 of assessed value. First Ward Councilwoman Marcia Weiss pointed out that the average assessed value of a home in Gloversville is $67,065 which under Rowback’s proposal would result in an average annual property tax reduction of approximately $17.43.
“It would go down $17.43 which comes out to $1.45 a month or $0.34 a week. I would love to give everyone in this city including myself a tax break, but I think in the situation that we’re in now, now is not a good time to be looking at a tax break,” said Weiss pointing out that the additional fund balance use would equate to a $100,000 reduction in revenue for the city next year.
“What’s going to happen if we don’t have enough revenue next year? We don’t have enough revenue this year,” she continued.
The city typically includes some level of fund balance allocation in the annual budget, but in recent years has been able to avoid expending some or all of the anticipated fund balance when sales tax revenues came in above projections. The city this year anticipates expending the full $1.56 million in fund balance allocated in the budget.
If the full $1.6 million fund balance allocation included in the 2021 city budget is expended, the fund balance is expected to sit at roughly $5 million at the end of next year after factoring in an additional $1 million planned allocation to a reserve fund for the eventual construction of a new Department of Public Works facility.
Second Ward Councilman Arthur Simonds described the proposed allocation as imprudent given the city’s tenuous financial situation this year and the uncertainty of next year.
“I don’t think there’s a person here that wouldn’t love to give our citizens $10 off or $5 off or $3 off but here we are in the middle of COVID, we just lost $1 million this year,” said Simonds.
Simonds estimated that between lost revenue in the form of anticipated fees collected by the city and the $460,000 reduction in AIM funding, the city will lose $1 million this year and possibly again next year. He went on to note that the city is currently in negotiation with police union and the Department of Public Works union and therefore cannot fully anticipate expenses for next year.
“We don’t even have a clue what that’s going to cost,” said Simonds.
Additionally, the council on Tuesday approved a short-term agreement with the Teamsters union representing employees in the Transit Department that keeps salaries flat but includes a one-time payment of $800 each to all full-time union members and $400 each to all part-time members. That contract runs through June 30, 2021.
Simonds went on to question the mid-meeting motion, noting that the city Finance Committee comprised of Simonds, Weiss and 6th Ward Councilman Wrandy Siarkowski reviewed Rowback’s proposal and ultimately informed him that the committee did not support the action based on the city’s financial position.
“We sent a message back to you saying we weren’t in favor of it at this time,” said Simonds. “Not until we had a revenue source that was somewhat equal to what we had before.”
According to Simonds, Rowback did not respond or pursue further discussion of the matter with the committee members.
“Usually the team members will get back to the committee and come back and say ‘listen, I understand you folks don’t want to provide any money but you know this is what I’m thinking’ and we can talk it over, but to bring it out in a forum like this looks political to me,” said Simonds. “Some, ‘look at me, I can go ahead on a break but look at all those people, they don’t want to do it,’ and I really dislike that.”
“With all the counties around us that are raising they’re taxes, we’re not, we’re keeping them stable and I think that’s more important than anything else,” he added.
The discussion ultimately ended when Rowback withdrew the motion at Anadio’s request. The budget and tax rate resolutions were subsequently approved as written without further discussion.