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Board debates overriding tax cap

The Newstead Town Board has yet to take a vote on a local law giving it the power to override the state-mandated 2 percent cap on the property tax levy, but a few town residents made it clear Monday that they oppose the measure.

The gist of the position taken by the six people who spoke was, why enact the measure if, as town officials have said, they don't believe they'll need it?

Supervisor David L. Cummings said, "It's not our intention to go over the cap, but if you do, you face penalties," which the town wants to avoid. He noted that the proposed 2012 budget of $4.4 million, on which a hearing was also held Monday night, has an increase of 1.8 percent in the tax levy.

The measure, to be voted on Nov. 14, needs three affirmative votes from the five-member board to pass. While some board members appeared ready to vote Monday, the consensus was to delay the vote. A vote on the tax cap override -- which is good for one year -- must be taken before budget adoption, according to the state law enacted in June.

Many municipalities, preparing next year's budget, are considering the override. Dealing with the property-tax cap -- a complex new law -- is new territory for taxing entities in the state as they struggle to balance budgets in the face of stagnant revenue and increasing costs, especially for health insurance and pensions.

The cost of health insurance was the one area questioned in the public hearing on the budget.

Cummings said Highway Department employees -- the only unionized employees -- contribute 5 percent to their health insur ance, an amount under negotiation for a three-year contract that would take effect Jan. 1. Non-union employees pay 10 percent toward health insurance and 50 percent of any annual increase.

Overall budget appropriations are $4,424,771, with $2,127,999 coming from property taxes. The general fund tax rate will increase to $1.42 from $1.40 per $1,000 of assessed valuation. The Fire Protection District tax rate will increase to $1.24 from $1.22; the drainage tax will remain the same at 9 cents per $1,000. The yearly rate for refuse and garbage collection will remain $189.40. Rates for each of 10 water districts -- consolidated into one district at the end of last year -- will vary, depending on whether they have an outstanding debt or a fund balance.

The budget vote will also be Nov. 14.