The 2014 budget for the Town of Red Hook was passed Nov. 6, and taxes will be going up by 5.98 percent, overriding the state-mandated property tax cap.
With debt service and capital projects appearing to be the major cost increases, the 2014 adopted budget comes in at $4,271,704, up $42,007 from 2013, with $2,710,422 to be raised by taxes.
Taxes for those in the village will go up by $47, from $225 to $271, on a home assessed at $260,000. That translates to $3.89 a month, “the cost of a large Dunkin’ Donuts coffee,” Business Manager Deb Coon said.
For the rest of the town, taxes on a similarly priced home will increase by $23.66 a year, from $570 to $593, or $1.97 a month. “That’s a small Dunkin’ Donuts coffee,” said Coon.
The Town Board discussed the 2014 budget in detail at a budget public hearing Nov. 6 before voting to approve it. Though the full board was present, no residents showed up.
Town Supervisor Sue Crane explained the $147,000 increase to town-wide, or “A” fund, expenditures as largely capital debt. This fund is 45 percent of the total budget and pays all town salaries, benefits, capital improvements and supplies.
Another significant increase in the town-wide fund is the cost of the purchase of development rights (PDR) for Greig Farm and Kalina Farm, which closed in the spring and goes to bond in 2014. The principal and interest is $44,000.
A new fund for 2014 called the “DA” Highway Town-Wide fund, with appropriations of $19,209, will be used for the bonding of the Schism Road bridge, severely damaged after Hurricane Irene. The fund may also be used for future repair and maintenance of town bridges, snow removal and payroll. Principal and interest on the bonding of the bridge is $19,209.
New town debts from the demolition of the old highway garage and a new Rec Park tractor total $73,648. Other increases to the “A” fund include paving the parking lot at town hall, a new copier and replacing computer equipment.
According to Crane, “everything goes up a little bit.”
“These capital investments are investments in our future as opposed to operating expenses,” Crane said. “If you think of them as long-term investments rather than expenses, it’s easier to absorb the reality of the cost that we’re bearing. We’re spreading it out long-term for people to enjoy it for many years to come.”
Crane later said, at the Nov. 12 town board meeting, that if the state can allow school districts to exempt their capital expenses from the property tax cap, it would be only fair to exempt municipalities from theirs.
The town’s elected officials will receive salary increases of 2 percent, bringing the supervisor’s salary to $27,532, and each of the four town board members to $7,730. The two justices each receive $15,895 and the highway superintendent will receive $58,366.
On the revenue side, revenues in all town funds are down: The “A” fund by 6.7 percent; the “B” fund, which funds the police, the planning and zoning boards, recycling and refuse, by 16.9 percent; the Highway “DB” fund by 9.6 percent and water district revenues by 5.4 percent.
A five-year comparison of the unreserved fund balance showed all the balances have come up from their 2008 lows to much more manageable levels. Only the water district hasn’t come up as the board would like.
Crane said that the water board would be asking for another rate increase before the first of the year “because they are so much lower than any other water service anywhere and we just feel that they need to keep that fund up.”
Last year’s tax increase was 2.43 percent, which the town board thought was under the tax cap due to various adjustments. However in February, a state audit found that the levy had been calculated incorrectly and had actually exceeded the cap.
So this year, Red Hook’s allowable tax levy increase was reduced to 1.44 percent because of the amount of tax collected last year that was disallowed, approximately $9,865. Town officials went into the 2014 budget planning phase knowing this year would be a challenging one for meeting the tax cap, and they passed a resolution Oct. 8 allowing them to override the tax cap if necessary.
At the time, Crane told the board the money committed to funding the capital replacements and farmland protection was worthwhile even if it meant exceeding the tax cap this year. She said the town board was aiming for small increases in taxes when necessary in order to avoid a cycle where taxes are not increased and then there is a huge spike.
“I feel that the work that we have done and the money that we have committed to doing what…town boards before us…believed was the right thing to do — to bond for money when we have to for open space and farmland protection, to maintain a capital equipment inventory — is so important,” she said.
Then she added, “One taxing year should not bear all of that expense. If we don’t have a capital plan, we end up at some point…where we have aged vehicles and we have to borrow a huge amount of money all at once and suffer for not having had that plan.”
“So what we’re trying to do is maintain a relatively level budget that is reasonable, that is responsible, and addresses these issues,” she said.