Legislature eyes property tax rate higher than proposed by county executive
Chautauqua County residents will likely have their county property taxes increase higher than the rate of inflation.
During a special Chautauqua County Legislature meeting Tuesday, lawmakers unanimously agreed to a local law authorizing an override of the tax levy limit for the 2021 county budget.
“This will be the first time that we’ve had to vote on the local law to override the tax cap levy,” said Legislator Chuck Nazzaro, D-Jamestown.
Nazzaro said that normally the property tax cap is at 2%, however, because it is tied to inflation, the cap for 2021 is 1.56%. That means the increase in the levy –the amount raised by taxes — would have to be below that amount.
Last month County Executive P.J. Wendel proposed a county budget for 2021 with a tax levy of $66,425,552, which is up 3% from 2020. His proposed budget had a tax rate of $8.41 per $1,000 assessed valuation, which was a 5 cent decrease.
Last week, the legislature reviewed Wendel’s proposed budget and increased the levy further.
While Wendel’s budget called for a 5 cent decrease, the legislature’s revised budget has a proposed tax rate of $8.49, which is 8 cents higher than Wendel’s and 3 cents higher from the current year.
The revised budget, was put forth by the Audit and Control Committee, still needs to pass the full legislature.
Nazzaro, who is the chairman of Audit and Control, explained the committee’s reasoning of increasing the levy during an interview before Tuesday night’s meeting.
“We felt as a committee, this is not the year to be presenting a tax rate cut because of uncertainty of the budget,” he said. “We feel this (revised budget) puts us in better footing moving forward.”
One of the biggest issues the legislature had was Wendel’s projection of sales tax revenue in 2021. During budget hearings, the Administrative Services Committee originally proposed a $2 million reduction of sales tax revenue. However in the middle of the week, a payment was received by the state, which was higher than was expected. By the end of last week, the Audit and Control proposed changing the cut in projected sales tax revenue from $2 million to $500,000.
Nazzaro said the reason it’s been difficult to predict the sales tax revenue is that in 2019, state law required sales tax on all internet sales. Before this, sales tax collection was only required on businesses that had physical stores in the state. So, for example, walmart.com collected sales tax in New York, however Amazon did not. Now both businesses are required to charge the sales tax.
“This is the big wrench and it’s a positive one because we’re seeing more sales tax,” he said.
The legislature also wanted to make some changes to prepare for not just 2021, but for the next five years. Because of this, Nazzaro said Audit and Control has proposed setting up a $500,000 contingency account.
Another issue that concerned Audit and Control is the decrease in collection of property taxes. So far, the county has received $3.8 million less in property taxes than in 2019.
“A lot of property taxes are not being paid. We didn’t have a tax auction this year; we’ll have two next year,” Nazzaro said.
There were some line items that were reduced, while others were increased. Nazzaro said 4-H was originally scheduled to take a $10,000 cut; that was changed to $1,250. Soil and Water was slated for a $10,000 cut, however that money was restored and a $10,000 cut was made to the Lake Alliance group. The county Industrial Development Agency was able to add a staff member using $25,000 recouped in the salary reduction for the individual replacing Don McCord, who retired earlier this year.
One difficult cut Audit and Control is proposing is cutting raises for managers from 3% to 1.5%.
“I have a very hard time justifying raises more than 1.5,%” said Nazzaro. “We’ve seen companies laying off, we’ve seen businesses closing. … It’s not that they don’t deserve it; we just can’t do it.”
In committee, Legislator Terry Niebel voted against the revised budget by Audit and Control, saying he wanted to keep the tax rate flat, instead of having it go up the 3 cents.
During Tuesday’s legislature meeting, Niebel did vote in favor of overriding the tax cap levy.
“Overriding the tax levy limit is not something I am looking forward to but I’m not sure we have a choice, so I will be voting in favor of this this evening,” he said before the vote.
The Audit and Control Committee will give one last look at the proposed budget at its Oct. 22 meeting before passing the budget along to the full legislature for its Oct. 28 meeting.