After years of staying under the state cap, this year Orchard Park’s Town Board is considering a dramatic departure and a 10 percent tax hike to go with its tentative $24.4 million budget.
The spending plan, which is 4.8 percent higher than this year’s, would cover fixed costs like a 6 percent increase in health care insurance premiums and about $400,000 in new items like computer upgrades and a school police officer.
Now the board wants feedback by email, phone or in person about the plan posted online Monday at http://orchardparkny.org (click on Town Financial Information). The budget plan must be approved by Nov. 18.
“Depending on the will of the people, we will adjust,” said Mike Sherry, council member. “We need to get a sense from the community.”
The 5-year-old state tax cap program is optional and intended to encourage municipalities to keep taxes down. It fluctuates each year.
This year’s increase is a lower-than-usual 0.73 percent. To compound difficulties, revenues are flat: sales tax income has been declining overall for a couple of years helped by low gasoline prices and the high American dollar, discouraging Canadian shoppers.
“It’s not sustainable,” said Tom Malecki, a partner in the finance and auditing firm that represents Orchard Park and 16 other municipalities in Erie County.
“We have no other revenue source to fund any increase in spending,” he said. “This is not going to go away.”
Last year Orchard Park’s budget was up by 2.5 percent, but the tax increase of 1.87 percent was just below the 1.88 percent tax cap. This year, fixed expenses alone would force the town above the cap, said Sherry.
Fixed spending increases include:
• $150,000 for the health insurance costs.
• $200,000 for extra workers’ compensation insurance costs.
• $100,000 in new expense for a shift in debt payments.
• $50,000 more for utilities.
Discretionary increases the board considers necessary:
• $250,000 for technology and software improvements, like a more-efficient records management system.
“The IT has been, by and large, put on hold for a number of years,” said Sherry. “You can only put that stuff on hold for so long and you begin to run into problems.”
• $200,000 in new wages for a new patrol officer to cover two officers expected to be promoted to lieutenant, a school officer, part-time worker hours and minimum wage increases.
The budget, as proposed, would take $1 million from the reserve fund and leave $4 million in the bank, a number Sherry and his fellow board members want to keep as is.
“Our concern is dropping down that reserve fund,” Sherry said. “That’s where we want feedback from the community.”
A typical $263,000 home in the town has an assessed value of $150,000. Under the current proposal, the taxes on such a house would rise by $7.12 to $92.12 a year. This year’s tentative budget was trimmed by about $500,000. Sherry expects to cut more from this version as well.