For the first time in years, Schoharie County property taxes are likely to rise in 2009.
County Treasurer Bill Cherry said Friday that rates will probably increase eight percent––pushed up by a combination of rising costs of salaries, insurance and utilities.
It’s a reversal of recent years when the county tax rate dropped, stayed flat or rose just slightly. And any increase hits taxpayers especially hard in a recession.
But an eight-percent increase, Mr. Cherry said, is better than the hike forecast in the earliest version of the budget: 15 percent.
“To me, that’s unacceptable. No taxpayer would swallow that,” Mr. Cherry said.
Overall, he said, costs are rising about $2.5 million for a budget of roughly $65 million.
“Even when we hold the line on spending––no new positions, as tight as we can be––costs go up four percent a year,” Mr. Cherry said.
He outlined the increases:
* Salaries under contracts rising three to four percent, $916,000.
* Benefits, including insurance, up $700,000.
* Fuel oil, gas and diesel, up about $700,000.
“Each one of these things requires new money that Schoharie County must find,” he said.
One positive Mr. Cherry will propose to the Board of Supervisors is having the county purchase electricity in bulk from Reliant Energy.
He estimated the county could save $150,000, from 2008’s figure of $675,000 to a projected $525,000 for ’09.
A savings in electric power won’t offset the other increases. Neither will current revenues, which Mr. Cherry characterized as flat.
In previous years, revenue from the sales tax increased $600,000 to $700,000 per year, but there was little or no increase in 2007 or 2008, and Mr. Cherry is expecting none next year.
Also, in 2007, the county’s property tax base rose $252 million, but “the assessed value hasn’t gone up at all” this year, Mr. Cherry said.
“Taxes drop because of new construction. It hasn’t happened,” he added.
Mr. Cherry plans to whittle the original 15-percent increase down to eight several ways:
* Get $700,000 from the county’s Gas Tax Reserve, which is set aside for tax reduction.
* Cuts and reduced requests in the tentative budget.
* See what might be taken from the county’s $7 million fund balance.
Mr. Cherry is reluctant to take much from the fund balance, however, because the county needs that money to operate in January and February, when it receives no revenue.
Other counties, he said, routinely spend down the fund balance, then have to borrow––and pay interest on the loans––to get through lean times.
“We need the fund balance to carry us through without borrowing,” he said. “We can appropriate a little but not a lot. It is what keeps us out of debt.”
With all the county departments’ budget requests in, Mr. Cherry will put them together to come up with a tentative budget by mid-October.
“Probably the tentative budget, bare bones, hold-the-line, will have an eight-percent increase,” he said. “I think we can get it there. But there’s zero chance of a decrease.”