JOHNSTOWN – The Fulton County Board of Supervisors during a budget meeting Monday voted 18-0 to use an additional $1.8 million of the county’s fund balance reserves to lower the county’s 2023 projected average property tax rate from $10.66 per thousand dollars of assessed value to $9.98.
The county’s 2023 $117.5 million tentative budget includes a 17.3% year-over-year increase in spending, due entirely to the county’s $18.7 million capital plan, of which $10.3 million comes from state and federal funding and $1.8 million comes from the county’s fund balance reserves.
The county’s tentative overall property tax levy was set to increase from $30.4 million for 2022 to about $31.1 million for 2023, up about $777,720, an increase of 2.6%, which is less than the county’s New York state-mandated property tax cap.
The county started its budget process with a projected average property tax rate increase of about 16 cents, taking it to $10.82 per thousand dollars of assessed value, but nearly all of the increase was eliminated at the start of Monday’s budget meeting, thanks to $635,995 worth of unexpected spending reductions.
Most of the spending reductions came from a $568,412 reduction to the county’s share of the cost of Medicaid (reducing it from $13.5 million to $12.9 million) due to increased aid from New York state. Another $50,000 was saved from health insurance rates being lower than Fulton County Budget Director Alicia Cowan had projected at the start of the county’s budget process, reducing the county’s projected health insurance expense for its current and retired employees from $36.21 million down to $36.16 million.
Using the county’s fund balance to cut the tax rate was proposed by Johnstown 3rd Ward Supervisor John “Jack” Callery after Cowan provided the board with a report of the status of the county’s fund balance reserve of unspent revenues.
“I think we need to give the taxpayers something back. It’s their money, I say it every year,” Callery said.
Cowan said the county will end 2022 with about $27.5 million worth of reserves, which is up about $500,000 from the start of the year, even though the county had budgeted spending $3.6 million in reserves to balance the 2022 budget.
Cowan said one factor in the county underspending its 2022 budget is the relatively high number of vacant job positions the county has struggled to fill throughout the year, which has likely resulted in at least $1 million in savings. Another factor that saved on reserve spending was higher than expected revenues in other areas like sales tax.
Cowan said the 2023 budget was already set to spend about $4.8 million of the county’s reserves and Callery then proposed spending an additional $1.8 million in fund balance reserves, taking the total to about $6.5 million, lowering the average county tax rate below $10 per thousand.
“It’s not our piggy bank, it belongs to the taxpayers, and with the cost of everything going up this year — whether it’s the price of gas, or everything else — if we can’t give a cut, there’s something wrong with us,” Callery said.
Cowan said the unexpected spending reductions for Medicaid and health insurance had already dropped the county’s need for a property tax levy to a rate per thousand of $10.66, and Callery’s proposal would drop a little bit further to below $10.
Fulton County Administrator Jon Stead cautioned the board to consider that the recent increases in federal and state aid were paid for with what he calls “artificial money,” mostly from the federal government, that won’t be available in the future. He said spending reserves on capital improvements will likely pay dividends in the future, but spending them to offset annually recurring costs is risky, although he agreed the county’s overall fiscal health likely provides “a little bit of room here.”
“The state will be looking at harder times if we transfer into any kind of recession in 2024 or 2023, and they will cut back on that state aid,” Stead warned.
Callery said the county is carrying more than the recommended amount of reserves by the New York State Comptroller’s Office, which is about 15% of a municipalities budget.
“Four or five years ago, they said we had about $13 million in our fund balance it was doom and gloom, and this was going to happen, and we needed a rainy day fund, but I’ve been here for 22 years — and you can check the record — and we only had to raise the taxes twice,” Callery said. “We’ve never even spent the fund balance that we applied to any budget by the end of the year.”
The 18 members of the board present for the meeting agreed to support Callery’s budget motion, with Caroga Supervisor Scott Horton and Johnstown 1st Ward Supervisor Jared Goderie absent.
Although Callery’s pitch for saving the taxpayers money referenced the price of gas, his proposal effectively lowered some property tax payers bills with reserve revenue paid for by sales tax from gasoline, due to the Fulton County Board of Supervisors’ decision earlier this year not to opt-in to Gov. Kathy Hochul’s gas tax holiday that allowed county governments to eliminate their sales tax on gasoline until the end of the year.
Which towns will actually see a county property tax rate cut or even a rate increase, however, remains to be seen due to the 8% overall drop in the municipal equalization rates countywide. Property owners in towns with greater drops in their equalization rate typically absorb a higher percentage of the county’s property tax levy.
When the county’s projected average county tax rate was set to be $10.66 the towns of Broadalbin (4.89%, 51 cent increase) Caroga (0.23%, 3 cent increase) Mayfield (6.11% 81 cent increase) Northampton (5.68%, 72 cent increase) Oppenheim (11.42%, $1.97 increase) Stratford (1%, 8 cent increase) and the city of Gloversville (0.63%, 5 cent increase) were all looking at county property tax rate increases for 2023 due to falling equalization rates.
Cowan said she will have the projected county tax rates for all of the county’s municipalities and for each the apportioned share of the county property tax levy, ready for the public hearing for the 2023 budget set for Nov. 29.