Schoharie County property owners could see a tax hike of five percent in 2011 thanks mostly to an unprecedented drop in property value in the county.
The $65 million tentative 2011 budget was presented to supervisors last week by co-budget officers Paul Brady and Alicia Terry.
Spending, mostly for employee benefits such as state retirement and health insurance, is up by about $1.6 million or 2.5 percent but that was not balanced by a $600,000 increase in revenue.
The proposed tax levy is up by 4.3 percent from $17.57 million to $18.33 million.
The average tax rate in the county could rise from 7.64 per $1,000 of assessed valuation to $8.05 per $1,000 though the rate hikes would vary greatly from town-to-town.
According to the tentative budget, the tax rates in the towns of Cobleskill, Conesville, Fulton and Summit would go down next year while the rates would increase in the other 12 towns including hikes of more than eight percent in Esperance, Schoharie and Wright.
In their budget statement, Mr. Brady and Ms. Terry noted that the full value of all taxable real property in the county showed a decline from $2.3 billion to $2.28 billion.
“Ordinarily we see growth in the value of taxable property from year to year as the result of new construction and changes in assessed valuations,” Mr. Brady and Ms. Terry wrote. Increases in the full value amounts have given the county additional revenue in the past to offset spending increases.
“Clearly the current recession has had a dramatic impact on real property valuation,” they wrote. “As we develop the 2011 budget and begin to think about fiscal plans for 2012 and beyond, we must be cognizant of the reality that growth within this area of our local economy will be limited.”
The budget officers also noted that though county revenue is projected to be up for 2011 from $44.7 million to $45.3 million, this included a one-time payment from Home Care of Rochester which is taking over the home health care services in the county and a revenue from the Federal Medical Assistance Percentage to reduce Medicaid costs will is scheduled to end in July 2001.
A driving force behind the increase in the budget are in the areas of employee benefits, Mr. Brady said Friday.
The biggest increases in spending are in the areas of state retirement and health insurance.
For 2011, the county’s contribution for state retirement will increase from $1.88 million to $2.4 million. Health insurance costs are slated to rise by 13.3 percent or $736,498 to $6.2 million.
No salary increase was budgeted for supervisors, the board chairman or department heads.
One area of positive news is sales tax revenue.
Sales tax revenue was estimated at $12.5 million for 2010 and through the end of September, the county has received $10.2 million with the more lucrative fourth quarter still to come. Compared to this time last year, the county had received $9.4 million in sales tax.
Though the numbers appear better, the budget officers did note that the sales tax revenue is still down compared to 2006 and 2007.
Sales tax revenue is estimated at $13.25 million for next year.
The proposed budget now goes to the finance committee for changes and revisions before coming back to the full board next month.
A public hearing is scheduled for Monday, November 8 at 10am and the board may adopt it late next month.