Essex County is currently staring down an $8 million budget gap in 2013, which could translate into a tax levy increase of about 26 percent. That reality has lawmakers looking at long-term solutions to balance the county's checkbook.
Jay town Supervisor Randy Douglas, chairman of the county's Board of Supervisors, said taxpayers and some supervisors will be mad if the county increases its tax levy by such a large amount, but the other options on the table aren't that attractive.
"It's going to be a hard pill to sell," he said. "Obviously, we have to do something."
County Manager Dan Palmer said supervisors intend to develop a three-year plan to balance the budget. His proposal, which was presented to supervisors on Wednesday, would hike the tax levy by 26 percent in 2013, 15 percent in 2014 and 3 percent in 2015.
Douglas said he has directed Palmer and Finance Committee Chairman Tom Scozzafava, supervisor of the town of Moriah, to present an alternative 2013 budget that meets the tax cap. Douglas said that plan won't look pretty.
"If we do that, we're talking about cutting all contract agencies, eliminating many, many jobs - probably 50 to 75 jobs," he said. "We're talking about reducing services, not buying new equipment that is desperately needed because we haven't bought new equipment in years. Those sort of things are the things that we have to weigh.
"For us to sell it to the public, we have to get away from the percentage increase. Everybody is looking at the the percentage increase because the governor has this 2 percent tax cap."
Palmer said the county "couldn't lay off enough people to meet" the tax cap.
Douglas noted that nine unfunded state mandates will automatically increase the county's budget by 10.5 percent next year, about a $1.7 million hike. Those include Medicaid, probation requirements and preschool special education, among others, that the county is required to pay for and provide, but the state doesn't fund.
Supervisors are trying to steer the conversation away from the tax levy increase and instead focus on the tax rate, which is likely to increase in 2013 but still be lower than neighboring counties like Franklin and Essex. Currently, the budget would increase the tax rate from about $2.40 per $1,000 of assessed value to about $3.60.
Palmer said a tax rate of $3.60 would mean that someone with a house assessed at $100,000 would pay approximately $126 more in taxes next year than they did this year.
"We went seven years with a zero percent increase, offset with fund balance," Douglas said. "(We) increased the amount of fund balance in 2006 by $12 million, and it was the same year we took on the new public safety building. So we were using that amount of money to really not pay for the services we provide. It was just taking away from the rainy-day fund."
The county's fund balance is down to $10 million. Douglas said that money is "now truly a rainy-day fund."
The county began budget negotiations with a $13 million budget gap. That figure has since dropped to about $8 million. Palmer said the county was able to reduce that deficit in part by spreading its retirement payments out over a 10-year period, which the state allows counties to do.
"It's not something we really like to do," he said. "We're kind of counting on the state, which is indicating to us that the retirement rates are going to level off. ... It doesn't really save you any money; it just spreads the cost out over a longer period."
North Elba town Supervisor Roby Politi said the state needs to stop talking about mandate reform and actually do something about it.
"If health insurance costs continue to go up like they're going up, it's going to be hard to balance any budget," he said. "It's easy for the state to balance the budget because they pass all of the costs down to the county and local government. It's crazy. They can be proud of themselves for balancing the budget, but the fact is they took a lot of the costs and they pushed them onto the county and local government. That's the easy way out. We need mandate reform."