Part III: Sales Tax Allocation
Impact on other local governments: Tax Rates and Fund Balances
Fact: At the time of the sales tax reallocation implementation, local towns and villages had fund balance reserve accounts averaging 85% of expenses. The NYS Comptroller recommends fund balances not exceed 30% without a reserve management plan.
Fact: Because of the financial burden of unfunded mandates, Chemung County was looking at a 20% plus property tax increase over the four-year period (2015-2018) or an increase in the County tax rate of $1.42 per thousand
Fact: The Elmira City Council approved the sales tax reallocation plan.
Observations from the review of municipal full value tax rate change and fund balances
*More than half of all local towns and villages during the four-year period (2015-2018) of sales tax reallocation lowered their property tax rate and on average continued to have fund balances in excess of 55% or nearly twice as high as the NYS Comptrollers guidance.
*Only two jurisdictions (Village of Elmira Heights and Town of Horseheads) increased their tax rate during this four year period higher than the county would have had to in order he raise revenues sufficient to offset the reallocation plan. However, the Village of Elmira Heights tax increases during the reallocation period (2015-2018) on average were no higher than the previous four-year period for the village. The Town of Horseheads instituted a town property tax for the first time to address the reallocation plan however; the town finished the 2017 calendar year with an annual operating surplus of nearly $1 million on $3.5 million in expenses and should be well positioned to offer a substantial property tax reduction below the county projected rate increase.
*The average town and village fund balance through the end of 2017 equaled 55% of total expenditures compared to 15.5 % for the County.
*The Town of Catlin and Village of Elmira Heights need additional attention regarding fund balances and service delivery and plans will be developed to provide support.
*All local governments should be commended for their efforts to work with the County to provide municipal services more efficiently and effectively.
PART IV WILL BE POSTED AFTER THE CHEMUNG COUNTY LEGISLATURE VOTES ON OCTOBER 9, 2018.