Price of the two percent tax cap
May 25, 2011 —
At the government center in Monticello two weeks ago, county manager David Fanslau went over the projected rise in the cost of state-mandated county-run programs in 2012. And the numbers are sobering. The cost of county Medicaid payment, for instance, will increase by $600,000. The cost of pension will increase by $2 million. All together, the total for nine separate state-mandated programs would be an increase of $3.1 million.
Additionally, Sullivan County is facing a budget deficit for the rest of 2011 of $1.3 million, and a shortfall of $13 million for 2012. But at the same time that the costs of services are rising, Governor Andrew Cuomo is pushing legislation that would limit the amount of any property tax increase to two percent or the level of the consumer price index (CPI), whichever is lower.
Fanslau said, right now, the CPI is 1.6%. So, if the tax cap becomes law, the county would be limited to raising about $779,000, nowhere close to the $3.1 million in state-mandated increases.
The state senate has passed Cuomo’s version of the bill. But lawmakers in the assembly are pushing for compromise legislation that would carve out some costs from the cap, such as those for pensions and healthcare.
Politicians in Albany predict some form of tax-cap legislation will be passed by June.
The conversation came as lawmakers were considering hiring two dozen employees to fill vacancies that have been created in the past several months while a hiring freeze was in place.
There is tension between the amount of personnel needed to deliver services to residents and the reality that some people who are hired now may be laid off in the new year with the adoption of the new budget.
At a meeting on May 19, lawmakers voted to hire employees to fill positions that have no immediate county impact because the positions are paid for with state or federal funds. However, each of these positions brings a future cost of about $10,000 per year in future retirement benefits if the new employee stays with the county for 20 years.
Lawmakers voted to staff five positions in the Department of Public Works because commissioner Bob Meyers restructured his department last year, combining some jobs and eliminating others. In return, lawmakers promised a certain number of positions to make the restructuring work. Further, lawmakers felt the department has been cut very deeply over the past few years.
Many positions that are considered crucial by the department heads remain unfilled.