Somerset approves 113% tax hike to combat declining revenue

Town Of Somerset Explains 113% Tax Increase

SOMERSET, N.Y. – The Somerset town board voted Wednesday night to approve overriding the town tax cap and increase property taxes by 113 percent, a move that residents were surprisingly in support of.

Channel 2 first report last week about the town’s proposed tax hike. The budget proposal itself led to an unprecedented town hearing, during which town supervisor Daniel Engert showed a lengthy presentation to show residents why it came to this.

The town’s former economic force, the Somerset Operating Company, is an economic driver no more. The coal-fired has had an 89 percent decline in revenue since 2008, leaving Somerset without any one large taxpayer.

A natural question from residents when the proposal came out was, why wasn’t the tax raise phased in over the course of several years?

Engert explained that since about 2012, the town tried to keep taxes low in hopes of bringing in some major development projects, but those attempts failed.

Eventually, the town began using its $1.6 million in reserves to both offset budget gaps and keep taxes low.

During the same five years, they reduced the workforce through attrition, and the 2018 budget is just $745,000, half of what it was in 2008.

By doing all this, taxpayers enjoyed a low rate with no raise for four consecutive years from 2013-2017.

Engert said there's simply not enough in reserves to maintain the balancing act anymore, and this is the year that felt they had to raise taxes.

Residents seemed to appreciate the explanation, and several voiced that they support the budget, at least for now.

“I had heard a lot of questions in the community when it was initially reported, but when I had an opportunity to talk to people and explain the context of the rate and then looking at other similarly situated towns, it changed their perspective,” Engert said. “I think some people initially thought all of their taxes were doubling, when in reality it was an increase of about $89 for a household assessed at $100,000.”

Engert blames the tax cap override on the New York State comptroller, who audited the town's finances in 2016 and determined town couldn't be paying residents' garbage collection fee with sales tax revenue; residents had to pay it themselves in the form of a tax. Engert says it was the town's contract with a refuse company called Modern Disposal Services that put them over the tax cap.

The tax hike works for the upcoming year, but the town will have to work on a more permanent solution going forward. The power plant could close by the end of 2020. New York State has created a mitigation fund to help the town through that transitional period, but it’s not available to Somerset until the plant closes. The state also wants to put Apex wind turbines in Somerset, which Apex suggests will help residents. However, residents feel wind turbines will lower their property values, and Engert feels the overall economic contribution would be trivial.

 

© 2017 WGRZ-TV


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