CAIRO — The Cairo Town Board adopted the town’s preliminary budget for the 2018 fiscal year.
The $2,801,185 spending plan and resolutions to exceed the tax cap law and continue the Cold War Veterans Property Tax Exemption were passed unanimously at the regular board meeting Nov. 6.
Councilmen Dan Joyce and Douglas Ostrander were absent from the meeting.
Cairo Town Supervisor Daniel Benoit said the property tax increase is about 3.95 percent.
The reason behind the board’s decision for the tax hike is, over the past few years, the town has had to pull money from the fund balance to make up for extra funds needed for a variety of other budget items, Benoit said Monday.
The town’s expenditures were more than its revenue for the last few years, so the town kept up with expenses by using money from the fund balance, the town supervisor said, adding the town also exceeded the tax cap for the 2017 budget by about 1 percent.
“The rest of the money has to come from somewhere,” Benoit said.
Board members considered other options for reducing the amount of money the town will use from the fund balance, Benoit said, but ultimately decided exceeding the property tax cap was the best option.
The town police department, ambulance and highway department were poised to take a hit, but the town board decided against making any cuts.
“This year, we would’ve had to dip into our fund balance about $340,000 if we stayed within the property tax cap,” Benoit said. “The current fund balance is pretty low at $460,000, and we didn’t want to dip into it that deeply.”
Cairo residents will be looking at about a $34 property tax increase per $100,000 assessment.
“We still have to dip into the fund balance, but not as much as we needed to [before the property tax increase],” Benoit said. “Significantly less — about half as much.”
For the town to not use any money from the fund balance, Benoit said property taxes would have had to be raised 13 percent, which would translate to a $94 increase on $100,000 assessment.
“We thought that was too big of a bite for people to take all at once,” Benoit said. “We decided to give a modest increase of about 3.95 percent.”
Benoit doesn’t know if the taxes will be raised again next year, but he is confident that if things stay the same, they probably will.
This decision is part of a “kicking the can down the road” strategy, Benoit said.
Possible solutions for the town are creating a better commercial property tax base, getting more businesses in town, or raising property taxes even further.
“We’re gonna have to come up with a long-time strategy to growing the town’s commercial tax base — and a short-term strategy of closing that gap,” Benoit said.
There is a strong possibility of an ad-hoc committee forming next year to figure out options and strategies for the town to deal with the budget’s shortfall. “We’ll see what the future holds,” Benoit said.
Town Councilwoman Mary Jo Cords said taxes had to be raised because of more than the fund balance issue.
“It wasn’t because of any one thing,” Cords said. “All of the expenses went up a little bit.
“In the past, prior to last year, our expenses have exceeded our revenue,” she said. “We’ve been digging into the fund balance and we don’t want to keep doing that — that would lead to no savings.”
Town employee salaries rose a small amount to keep up with the state’s increasing minimum wages, Cords said.
The town starts it’s employees out at $11 an hour, Benoit said. The increase in an employee’s salary depends on a few factors, including the position the employee has or if he or she is a member of a union.
The state’s base minimum wage in Greene County is $10.40 per hour through Dec. 30, 2018, according to labor.ny.gov. The state minimum wage will continue to increase through Dec. 30, 2021, when the region’s base rate will reach $12.50 an hour.
“We haven’t really had any major new construction that would add anything to the assessment rolls,” Cords said. “We want to attract some businesses into the town.”
If there was a natural disaster, such as Tropical Storm Irene six years ago, there would be no funds to fall back on, Cords said.
“That’s why we had to increase [the property tax rate],” she said. “So we’re taking less and less out of the fund balance so we don’t totally run out.”
To reach reporter Anthony Fiducia, call 518-828-1616 ext. 2309 or email firstname.lastname@example.org.