Red Hook village taxes will be going up this year, and you can blame that on declining home assessments and the cut in county sales tax revenue, according to village officials.
Village officials expect a 4.45 percent property tax levy increase to help fund a budget of $1,761,890 for 2013-2014, which translates to an increase of $40 for a house valued at $200,000.
To raise the necessary funds, the village board was expected to vote to override the state-mandated property tax cap at its meeting April 8.
The new budget is actually $13,206 lower than last year’s, but a decrease in assessed home values as a result of the still-struggling real estate market caused the village board to raise taxes above the 2 percent cap this year, according to Mayor Ed Blundell.
The assessed value of the village’s tax base sagged from $191 million last year to $188 million this year, Blundell said, which is about a 1 percent decrease and a $20 million decrease from four years ago.
In all, $1,151,183, or 65 percent of the budget, will be raised from taxes for the 2013-2014 fiscal year. The tax levy will be $34,900 higher than last year’s. Over half of that amount, $18,375, is due to the cut in county sales tax revenue, according to Blundell.
To save money, the board has applied to join the Dutchess County workers’ compensation pool, which offers lower premiums because it represents a larger pool of workers. Blundell told the board at its March 21 workshop that the county, “likes us as a risk, they can place us in the pool.” As of press time, however, the board had not received confirmation on the premium cost.
If the premium is much lower than the current cost of the village’s workers’ comp policy, the board might decide to lower the tax levy by the amount of savings, Blundell said. But he also thought the board might choose to use the savings on a project that needs to be completed instead of lowering taxes.
Asked whether he expects the village to be able to add to its fund balance at the end of the 2013-2014 fiscal year, Blundell said, “We would like to. Unfortunately for several years, since 2007, the village has not operated with a fund balance…[it] puts incredible pressure on all of us. We would like to reconstitute a fund balance, but I don’t know until [the fiscal year is] over.”
Blundell said he uses the mantra “policy meets economy” during budget season to encourage board members “to look at what our policies could be for the upcoming year and what we can afford to do.”
Any changes to the budget must be approved by a resolution, and the budget must be adopted by May 1.