FULTON COUNTY — While it seems as if the cost of everything is going up, county property tax rates for 11 of Fulton County’s 12 municipalities will go down in 2023.
County tax rates vary between the municipalities throughout the county due to rising and falling equalization rates, the formula New York state uses to measure the gap between the assessed value of property and the actual sales price of property, in order to more fairly distribute the property tax burden.
Fulton County Budget Director Alicia Cowan said Tuesday that only the Town of Oppenheim will see a county tax rate increase per thousand dollars of assessed value, rising 47 cents from $17.25 per thousand to $17.72 cents per thousand.
“That has to do with the optional mandates [regarding property tax assessments for] solar and wind,” Cowan said of Oppenheim’s increasing tax rate.
Cowan said with the property tax cut in place, Fulton County is effectively $2.9 million under the NYS mandated property tax cap for 2023.
The $116.9 million 2023 Fulton County budget supervisors adopted Tuesday increases year-over-year county spending by 17.2%, yet lowers the county’s total property tax levy from $30.36 million for 2022 down to $28.72 million.
Rising costs in the budget are mostly due to the county’s $18.7 million capital plan, and are partially offset by increasing revenues, with a 34% increase in state and federal aid, up $8.2 million from 2022, and the county’s prediction that sales tax revenues will increase by about $2 million for 2023.
The decision to cut property taxes for 2023 comes after the board’s decision in June not to suspend or cap the county’s local sales tax on gasoline.
Gov. Kathy Hochul in June suspended about 16 cents per gallon of the state’s different taxes on gasoline and gave county governments the option to suspend or cap the local sales tax on gasoline. Of the 62 counties in New York state, 25 chose to limit the local tax on gasoline. Fulton County was among the 37 counties that did not.
Keeping the county’s 4% sales tax on gasoline in place amid rising gas prices helped Fulton County’s sales tax receipts for the first three quarters of 2022 to increase by $1.7 million (total sales tax $23.9 million) from the first three quarters of 2021 (total sales tax $22.2 million) — a 7.7% year-over-year increase, according to data released by the New York state Comptroller’s Office in October.
The $1.64 million countywide property tax levy reduction is paid for in the budget mostly by the Board’s 18-0 decision last month to spend an additional $1.8 million of the county’s estimated $27.5 million fund balance reserve of unspent revenues to balance the budget and lower the property tax burden.
Johnstown 3rd Ward Supervisor John “Jack” Callery proposed the property tax decrease, citing the increased cost of living caused by inflation, particularly in gasoline prices, although the county’s reserves are at least partially built upon rising sales tax revenues. He also argued the county’s reserves were well in excess of the New York state Comptroller’s guidance that counties should not hold more than 15% of the value of their total budget in fund balance reserves.
During the budget process, Broadalbin Supervisor Bruce VanGenderen, who served for years as the finance commissioner in Gloversville and often warned of the possibility of a ‘fiscal cliff’ that could be created when costs rise without corresponding property tax increases, expressed concerns about the county spending its reserves to finance a property tax cut amid cost increases elsewhere in the budget.
Before the supervisors modified the spending plan, the county’s 2023 “tentative budget” had already included spending $4.7 million from the fund balance reserves to balance the budget, up $1.1 million from the amount spent from reserves for the 2022 budget. With Callery’s increase in place the 2023 budget now spends $6.5 million from the fund balance reserves.
During budget meetings in November, Cowan told supervisors there is good reason to believe the county’s fund balance reserves will not be significantly diminished in 2023. She said despite the county anticipating it would spend $3.6 million from its fund balance to balance the 2022 budget, the county is actually on pace to add about $500,000 to the reserves thanks largely to spiking sales tax revenues and the county saving significant money from its inability to fill certain county jobs, likely saving between $1 million and $2 million in expenses.
After the board adopted the 2023 budget Tuesday, VanGenderen said he still has some concerns, but he’s not too worried at this point.
“I’m the new kid on the block here [as a supervisor], so I’m not going to raise too many waves, but apparently the reserves are there, and one of the reasons is that [for a county department like the Dept. of] Social Services they are short like 30 people, but they budget for all 30 of those people, which is proper, to budget for those things. But what’s been happening is they can’t fill the spots, so consequently they end up with the reserves. So, I guess, on first glance, you could say we aren’t being conservative, but since we haven’t been able to hire these people, and we budgeted for them, we are being very conservative.”
Without any action from the supervisors, the total county property tax levy was set to rise on its own to $31.14 million, due to a roughly $30 million year-over-year growth in the estimated total assessed value of all of the property in Fulton County, increasing from $2.4 billion to $2.87 billion.
Had the supervisors not deliberately lowered the county’s average property tax rate, it would have risen to $10.82 per thousand dollars of assessed value, increasing the year-over-year property tax rates in seven of its 12 municipalities: Broadalbin (up 4.89%), Caroga (0.23%), Mayfield (up 6.11%), Northampton (up 5.68%), Oppenheim (up 11.42%), Stratford (up 1%) and Gloversville (up 0.63%).