Chemung County could face future fiscal challenges if current conditions don’t change, officials said at a Monday budget workshop.
Thus far, the county has shared services with other municipalities, changed health insurance plans and instituted higher pension contributions for new employees to save costs. However, a stagnant tax base and lower sales tax revenues could lead to an eventual tax increase, Budget Director Steve Hoover told county legislators Monday.
Legislators scrutinized County Executive Tom Santulli’s $188.87 million budget proposal at a Monday evening session that lasted over two hours, questioning everything from payroll to cellphone bills to increases in state-mandated programs.
Santulli’s proposal keeps the full-value tax rate at $6.86 per $1,000 of assessed valuation, the 12th consecutive year Chemung County has not raised property taxes. However, if the county doesn’t begin receiving enough revenues to match its expenses, taxes could increase in the coming years, Hoover told legislators.
Sales tax receipts in 2016 are projected to come in at more than 2 percent below 2015’s figures. Chemung County has seen lower sales tax revenues for six consecutive quarters, Hoover said, attributing the declines to increased online shopping and a general economic slowdown upstate.
The county also has had a stagnant property tax base for the past three years, he said.
The 2017 proposed budget relies on $1.07 million in fund balance to close the gap between revenues and expenditures, which would leave between $21.6 million and $24 million in reserve at the end of 2016, or somewhere between 12 percent and 14 percent of total funds.
State officials recommend a fund balance of at least 10 percent, Hoover said, estimating the county’s fund balance would fall below that level in 2019 if revenue trends continue and could be completely depleted by 2021 or 2022.
Legislator Neil Milliken asked Hoover at which point he would recommend a tax increase to county officials.
“If we stay on the current course that we are (on), I could see that happening in 2019,” he said. “Every year, we seem to have expenses greater than revenues.”
Several factors — including state mandate relief, contract negotiations with the county’s employee unions coming up in 2018, and changes in health insurance costs — could mitigate the impact on the fund balance, officials said.
Santulli said Monday he remains against increasing the tax rate if avoidable, citing New York’s high taxes as a reason people relocate outside the state.
“Our taxes are still too high,” Santulli told legislators. “It’s not conducive to bringing business here, bringing people here.”
Legislator Rodney J. Strange said he is opposed to raising taxes now or in future budgets. “I agree with County Executive Tom Santulli, our residents are already overtaxed and cannot afford higher county taxes. I will not support a budget that increases taxes. Period,” Strange said.