The time has come, says Town of Batavia Supervisor Greg Post, for town property owners to start paying the piper.
They've enjoyed the benefit, as well they should, Post said, of a zero-rate property tax for 35 years, and over the last 12 or 15 years, gotten that benefit while the town has spent cash reserves to keep its budget balanced.
With a drop in sales tax, increased costs for employee benefits, greater expenses in the highway department, and loss of income on certificates of deposits, the town needs to institute a property tax, Post said.
With only $2 million left in the fund balance, Post said it's time to slow the rate of deficit budgets.
"I don't want to risk our bond rating and the security and the financial future of my successor, and I don't think it's fair," Post said. "To be quite honest with you, it's possible to stretch it right down to the wire and leave and let somebody else figure it out, but I'm not wired that way."
The proposed property tax rate is $1.42 per thousand of assessed value. That will raise approximately $500,000 to help cover town expenses, but Post still projects spending more than $600,000 from cash reserves, leaving a projected fund balance at the end of 2016 of $1.4 million.
The total anticipated general fund expenditure for the Town of Batavia is $4.64 million, down from $4.92 million in 2015. Even with the $300,000 cut in spending, there isn't enough money to go around, Post said.
For the past several years, town revenue has remained flat and in some years decreased, Post said. A big portion of the sales tax that flows into the county (shared by the county government with the various towns, villages and the city) comes from the sales tax on fuel sales. With gas prices dropping from roughly $4 a gallon to nearly $2 a gallon, and the expectation that gas prices won't increase anytime soon, Post is projecting a drop in sales tax revenue for the town of $150,000.
"It's like running a business without no receipts," Post said. "You put a donation in and have a Santa Claus in the front ringing a bell hoping someone will throw enough money in to make payroll every week. That's kind of what it's been like here. You have to really work hard to leverage as many dollars as you can from every funding agency that allocates funds, make grant applications and sustain a model that supports success."
Building a sustainable local economy has been a big focus of the town board for decades, Post said, and those efforts have led to Gateway II with Ashley Furniture, Milton Caterpillar, Sanitary Sewer, and more recently Med-Tech Park and the Genesee Valley Agri-Business Park.
But those efforts haven't come cheap. The town invested $1 million in infrastructure to support such projects and has had to forgo revenue on construction sales tax and mortgage tax, given away in the form of incentives for developers and business owners. While Post doesn't begrudge those incentives, he says he has to budget with the reality he faces, which means he can't forecast those revenues on any potential new projects in the town, no matter how big.
"If we're not in that market (of tax incentives), then we don't get those projects," Post said.
Those projects have brought into the town tens of thousands of dollars in permitting and zoning fees, Post said.
Also, those projects have increased the total assessed value of property in the town by $128 million, with some $64 million of that increase already out of PILOT exemptions and taxable with the new property tax.
Without that increase in taxable assessed value, local property owners would likely be looking at a property tax of $1.75 per thousand rather than $1.42 per thousand, Post said.
Post praised town employees for doing a great job of finding ways to cut spending and gave employees credit for saving the town about $600,000 in expenditures in 2015, but there's only so much that can be cut, he said. There's a public hearing on the proposed budget Nov. 4 and he invites residents to make alternate proposals to the proffered spending plan.