With an overall increase of 2.43 percent in the tax levy, the preliminary Red Hook Town budget for next year stays within the state-mandated tax cap while avoiding large cuts to existing programs and staff.
The preliminary budget, at $4,325,361, is 7.1 percent lower than this year’s and appears to tighten already lean department budgets.
Under the preliminary budget, the tax increase for a homeowner with a house valued at $280,000 would be $3 in the village and $29 in the town. Village residents pay less in town taxes because they pay village taxes for similar services, like village paving and snow plowing.
A public hearing on the budget will be held tonight, Nov. 7, at 7 pm at the town hall.
At the town board meeting Oct. 24, Town Supervisor Sue Crane reported, “All department budgets took some reduction of some magnitude,” and she termed the reductions a “necessary step in order to keep the staff that we have and programs as best we can.”
An anticipated decrease of 22 percent in revenue streams posed a challenge for budget staff and the board. Mortgage taxes alone have a projected shortfall of $52,000, which Crane noted was a “function of the sluggish real estate market.”
And Red Hook expects to get more than $50,000 less from its share of county sales tax revenue after Dutchess County Executive Marc Molinaro’s recent announcement of a hard cap on the sharing. Towns had expected to share $29 million in revenues, but Molinaro’s plan limits the amount to $25 million in order to help the county meet its budgetary challenges.
To soften the blow, Molinaro has said the county will cover Board of Elections costs, to the tune of $25,000 for Red Hook in 2013.
Crane said she had sent Molinaro a letter requesting assurances that, if the sales tax rate for the county should increase in the future , municipalities would share in that increase.
The budget will not take any money from the fund balance, which was approximately $715,000 for 2012.
One area of reduction is consultants’ fees within the planning department, due to the completion this year of a major investment in town planning. A positive cut to the budget is spending on utilities for town hall, which will see a $3,000 reduction in 2013 as a result of solar panels installed on the roof through a grant in 2011.
A reduction in hours for the part-time building inspector Bob Fennell will trim about $1,000 and the removal of the MTA payroll tax, which towns no longer have to pay according to a court ruling earlier this year, saves almost $4,000.
The budget includes a 2 percent salary raise for all town employees. There are nine full-time employees in the highway department, four full-time and four part-time employees at town hall, and nine elected representatives, two of whom are full-time.
“Many employees here have been long-time employees who have great experience,” Crane said at the board meeting in explaining the increase. “A modest increase is a sensible thing to do when you have valuable employees who are also necessary. We don’t have any people who are expendable.”
One area of growth in the budget is the addition of contingency funds totaling $59,500, which would be used to deal with the aftermath of serious storms like Hurricane Irene in 2011 and other emergencies. The town consulted with a municipal auditor in order to come up with a formula for such reserves.
One way Red Hook is grappling with budgetary constraints is through shared services. A wood chipper will be purchased with the Town of Milan, each town paying for half the cost.
The Village of Red Hook will share the new highway garage with the town through an inter-municipal agreement that should save both municipalities money in the short and long-term. Other avenues of revenue-sharing being explored include shared recreational facilities with the school district and shared dog control responsibilities with the Town of Rhinebeck.
For the 2014 budget, Crane indicated that the town may be able to join a county-wide health insurance plan, which would decrease the cost of premiums. A unified workers’ compensation plan is also being worked out at the county level.
The board will decide after the public hearing whether to make changes to this preliminary draft. An official draft of the budget must be filed by Nov. 20 with the state comptroller’s office.
Despite all the challenges, the board members seemed to agree that the budget preparation process had gone very smoothly.
Councilman Bill O’Neil commended Crane’s leadership and expressed his admiration for the staff who put together the preliminary budget. “The product you have created this year is amazing and it’s very good for the town. We should all be very pleased with it,” he said.
At the meeting, Councilman Harry Colgan added, “[This budget] treats everybody fairly and that’s what it’s all about.”
After the meeting, he noted, “Every change that the board made was done on a vote of 5-0.”
Councilwoman Brenda Cagle later speculated that the process was smooth because of the challenges faced. “Everyone realizes it’s a time to be cautious and work together,” she said.