This week, Paul Feiner released his 2017 tentative budget for Greenburgh. In it, he mentions his compliance with the NYS property tax cap six times, and his perfect record for staying just inside the cap. The unincorporated area, which includes Edgemont, will face a 2.52% increase in the town “B” budget tax rate.
But the continually rising Town tax rate is not the whole story.
First, spending in the budget is up, substantially, in major categories and overall:
TDY Center: +9.4%
Total Rec: +4.8%
So what is the difference between the 2.5% tax hike and the 5.6% total spending spike? How is the Supervisor covering his ever-increasing costs?
He is recommending appropriating $3.9MM from the Town’s fund balance, the rainy day “till” we’ve all paid into. If he didn’t draw on those reserves, the effective tax rate increase would be closer to 10%. In effect, he’s draining down savings in order to increase departmental expenses.
That’s not the entire story, either. In order to balance the budget, Mr. Feiner adds in prosp ective building fee revenue from projects like Shelbourne and Regeneron. In the past, he’s added hundreds of thousands of dollars into the budget prior to the granting of variances or having certainty of revenue timing -- an aggressive approach that incentivizes unnatural short term acts like modifying land uses ad-hoc, which have long term consequences if also left unplanned. In 2015, the building fee actual revenue was $2MM, and this year it's budgeted at nearly $5MM. If that number drops because projects are delayed, the expense to the taxpayer will be even higher.
Tapping fund balances and optimistically budgeting building fees to meet spending increases is simply not good long-term financial planning. The Town’s expense base is increasing and shows no signs of abating.
At the last EIC forum, we explained that a Village of Edgemont has the potential to operate at a surplus through:
• Our large tax base, which is growing as a percentage of the unincorporated area and would generate more revenue per capita than most local villages;
• Opportunities for efficiency, particularly in the area of sanitation; and
• Savings from not funding the Town’s expensive and duplicative multiple parks and recreation departments.
We outlined a budget surplus potential of $2MM out of $16.5MM in revenue or a 12% cushion. We also explained how Edgemont’s share of Greenburgh’s debt service will decline upon incorporation, thereby freeing up more cash flow for the newly formed village to spend as determined by the Edgemont community.
The question that everyone has for the EIC is this: How will incorporation affect our property taxes by comparison to the status quo?
To give the best educated answer, it’s worth looking at the historical tax increases Mr. Feiner has implemented.
Average annual growth rate in tax rate, 2002-2017: 4.9%
Average annual growth rate in tax rate, 2012-2017: 3.1%
Thus the “status quo” is a long history of tax hikes and short-term maneuvers to allow spending to spike. Conversely, with the Village of Edgemont’s starting budget cushion and the additional free cash flow as a village, we believe the long-term trajectory of Village taxes would be more favorable to residents. We look forward to providing a feasibility study with more detail.