Taxes and Fees
The 2012 Town of Lancaster tentative budget is out for public review. Town and Village of Lancaster taxpayers will not only be pleased to hear that the town held the line on taxes, but that they would see a slight reduction of 0.91% from last year.
Village of Depew residents will see their 2.34 tax rate unchanged and tax obligation remain the same.
The total town budget (all funds and district) increased by 1.71%, from $29.69 million to $30.19 million.
According to the published budget, the tax rate per thousand dollars of assessed property value will decrease from 8.11 to 8.03. Lancaster residents having a home assessed at $200,000 will realize a $16.19 tax reduction from last year’s bill. Instead of paying $1,780.34, they will pay $1,764.15.
Considering this is the first year of the state mandated 2% tax cap, the proposed budget is quite a surprise.
Whereas the town was obligated to formulate a budget that would be the lower of the CPI (estimated at 3.5%) or 2%, coming in with a flat-line budget is commendable. In fact, more so considering the town could have come in with a budget increase of 2.8% because of the 2% allowable tax cap exemptions – employee retirement contributions over 2%, tort orders, PILOTS, and tax base growth factor.
However this budget assumes that the town’s four unions will agree to a pay freeze this year. All four unions are currently in contract negotiations with the town. Their current contract expires at the end of the year. Verbal assurances have been given by the fire departments that they will accept current contract stipulations when renewing their contract as well.
Should the unions balk at taking a pay freeze, and why shouldn’t they considering there is no evidence they are being asked to contribute to their health care plan, where will the town get the money to pay them should a later settlement include retro pay?
And considering the police have binding arbitration in place, what are the odds the police union will accept what is being proposed?
This is quite the gamble and should the town’s gambit fail we could very well see a town board override the 2% tax cap next year and a large tax increase – as happened last year where the tax levy increase was 14%. This budget proposal holds the tax levy increase to 0.71%.
The following data reveals somewhat on how the budget resulted in a mere 0.71% tax levy increase – far below the 2.8% tax levy increase the town was allowed by state law.
* No salary increase for any town employee.
* Town spending up by 2.2% was offset by a 5.68% increase in revenues.
* Debt service decreased significantly.
* Real property tax item revenue increased by 37.21%; from $615,100 to $843,950.
*Non property tax item revenue increased by 5.55%; from $4.56 million to $4.81 million.
On the negative side was the significant employee benefit program costs.
General Fund spending
Overall General Fund spending increased by 2.2%; from $22.68 million to $23.18 million.
General Fund Townwide increased by 2.12%; from $8.36 million to $8.53 million. While debt service decreased by 6.14%, employee benefits increased by 16.63%; from $2.32 million to $2.34 million.
General Fund – Town Outside Villages spending increased by 5.11%; from $955,879 to $1,004,745. Employee benefits increased by 26.69%; from $132,637 to $168,044.
Police Fund spending increased by 2.43%; from $9.07 million to $ 9.29 million. Again, no salary increases are factored into this budget and an estimated revenue increase (sales tax and other receipts) of 8.43% ($338,500) helped to reduce the tax levy number. Town employee benefit contribution spending increased by 5.95%; from $2.05million to $2.18 million.
Highway Department spending increased by 1.45%; from $4.003 million to 4.095 million. While debt service decreased by 37% ($512,814 to $322,739), benefit contributions increased by 23.11%; from $606,088 to $ 746,133.
Outstanding Serial Bonds – decrease from $2.81 in 2011 to $1.93 in 2012; a 31.2% decrease.
Interest on Outstanding Debt - $107,157 in 2011, now $72,553; a 32.3% decrease.
Outstanding Bond Anticipation Notes - $13.08 million in 2011, now $12.39 million; a 5.28% decrease.
Interest on BANS - $196,000 in 2011, $185,000 in 2012 budget; a 5.16% decrease.
Total Town Debt Service decreased by $1.57 million (9.88%); from $15.89 million to $14,318 million.
Total Debt Service interest payment decreases by $45,469 (14.99%); from $303,282 to $257,282.
What should also be noted here is the debt authorized but not expected to be issued by 12/31/10:
Heritage Trail Project – Authorized $250,000 – Unissued $250,000
Police/Court Building Project – Authorized $10,000,000 – Unissued $7,500,000
OEM HVAC System Project – Authorized $130,000 – Unissued $30,000
Townwide Water Line Imp Project – Authorized $7,000,000 – Unissued $400,000
Schwartz Road Water Line Imp Project – Authorized $990,000 – Unissued $990,000
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