The past several weeks have brought numerous inquiries regarding the
declining fund balance within the town of New Hartford and the need in 2010 for
a 54 percent property tax increase.
Therefore, I wanted to share my
views and conclusions on where the town financial plan is today and what it
might be in 2010.
In today’s dollars, a home assessed in New Hartford in
1999 at $150,000 paid $300 in town property taxes for all town services we
enjoy, such as police protection, beautiful parks, a library, a senior nutrition
site and road maintenance. In 2009, that same house paid $329, or just an
increase of $29, a 10 percent increase over 10 years. It wasn’t reasonable to
believe that the town could continue sustaining inflationary increases in
salaries, benefits and utilities without having similar increases in revenues
and thus began the progression of utilizing the town’s fund balance instead of
raising property taxes.
The reason for the large decrease in the fund
balance and the significant tentative property tax increase being recommended is
due primarily to the simple fact that a portion of everyday town expenditures
were budgeted to be paid from our fund balance (savings account) when
expenditures could have been reduced and annual property tax increases should
have been proposed and implemented. The town’s sales tax revenues were not
meeting expectations during that period and further drained the fund balance to
an anticipated $150,000 by the end of 2009.
Additionally, many challenges
confronted our town in recent years with a convergence of mitigating factors.
The bottom was falling out of our economy, affecting our sales tax projections,
bank interest on all our deposits was dramatically decreasing, health insurance
was experiencing double digit increases and the price of gas soared.
The
town did have significant progress in aspects related to quality of life
residents have come to expect, such as initiating a nuisance abatement law,
successfully defeating the power line installation by New York Regional
Interconnect, upgrades to the town’s court system, and completing storm water
drainage projects on Oxford Road and Jubilee Estates. The library expansion,
Rayhill walking trail, completion of a dog run and improvements to the Veterans
Memorial Park Gateway added to the services many residents continue to utilize
and enjoy.
During the same period, we were able to retain The Hartford’s 500
jobs through relocation to the New Hartford Business Park, as well as having
worked with the Sitrin Home for their expansion and the successful court
challenge regarding the Preswick Glen tax status.
All that said,
hindsight is always 20/20 and it is apparent to me that we should have hired a
comptroller several years ago. That comptroller could have provided financial
projections that might have predicted the need for property tax increases within
the past several budgets, as well as having outlined necessary cuts in
expenditures and reductions in sales tax revenue estimates instead of relying
upon the fund balance to balance the annual budgets
Let me be clear: The
54 percent property tax increase that is being recommended within the 2010
tentative budget may have no impact on fund balance reserves in 2010. Possible
consolidation, attrition through not filling positions when they become vacant
and the active pursuit of new revenue sources are not the only answers to
increasing our reserves. Every department head and board member has been
challenged to provide further cuts to the 2010 tentative budget in an effort to
bolster our town’s fiscal foundation and future so that core services our
residents expect and deserve will not be adversely affected in
2010.
Earle C. Reed is supervisor of the town of New
Hartford.
