Keeping the Cap on Taxes Override Not Yet Enacted



Article Contributed by
Walt Pickut

On Monday, October 25, the Jamestown City Council passed a local law permitting the city to request an override of the state’s constitutional 2-percent tax cap increase (but only if needed) for the 2017 Jamestown budget. Reports stating that the tax cap has already been raised are untrue.

That request has not yet been made – and it may not be. According to City Council President Greg Rabb, the mayor and council are working very hard not to do so.

“The October 25 vote is a legal formality which we approve every year,” said Tony Dolce, City Council member for Lakeview Ward II, “just in case we need to ask for it. Last year we did, but the year before that we did not.”

Ideas Needed
Jamestown’s Mayor Sam Teresi has scheduled a public budget meeting for Monday, November 7 at 9:00 a.m. in the Municipal Building’s 4th floor Training Room, according to Town Clerk Jim Olsen. The public is invited. Attendance is urgently needed.

“We listen to what people have to say,” said Tom Nelson, City Council member representing Willard Heights Ward VI. “The council works well together. We all have the same goal.”

“We have been holding open meetings to discuss all department budgets for two months,” Council President Rabb told the Gazette, “but we need much more public attendance and input at those meetings.”

“I can assure you people ask me a lot of questions,” Rabb said. “I’m always impressed by what happens when people get involved. I am pleased when people who are mad about something show up, ask questions and voice their opinion. Apathy is worse than anger.”

“We are also working with the New York State Comptroller’s office to create strategies and solutions to deal with our budget,” Rabb added, “but nothing can substitute for direct input from our citizens.”

The Figures
The city spending plan must be balanced and approved before December 1, 2016.

The draft executive budget, as proposed by the mayor on October 11, is not yet balanced. According to council members more than $800,000 of necessary spending must be cut or income must be found to balance it. This amount would raise the tax levy by just over $150,000 (0.96%) and exceed the state’s constitutional tax cap limit by approximately 0.68% for 2017, or about $43,000.

The purpose of the public meeting is to find ways to avoid such tax increases. To understand the complex formula for tax cap overrides, the 16-page “Property Tax Cap Guidelines for Implementation” can be found at (type Tax Cap Implementation in the search box).

The City Council has been cutting services and spending for many years, according to Brent Sheldon, Council member for College Ward 1. Sheldon is the only Council member who voted NO on the October vote to authorize requesting the tax cap waiver if needed, “And I voted that way last year, too,” he added. “This is my third term as a city Council member and this is the worst I have ever seen.”

“There’s no fat left in the budget to cut,” Sheldon said,“and the other council members agree with me on that. But I don’t believe there is a reason to raise the tax cap yet, either. We have more work to do and public input is needed in that. But if we do find more cuts we can make, postponing them for now will only make it worse later.”

Proposals to increase city revenues, with increased fees for example, are not seen as a sufficient solution but may play some role in rebalancing the budget. Fees that are imposed by a special district or city agency are not subject to the property tax cap since they are not taxes.

Restructuring Benefits
“We’re all doing more with less,” Joseph Bellitto, Jamestown City Comptroller said. “We’ve cut out about 20 percent of city employees, for example, over the last 16 years.”

“Fortunately,” Bellitto added, “we have been able to qualify Jamestown as a Fiscally Eligible NY Municipality, for each of which the state’s Financial Restructuring Board for Local Governments has set aside $5,000,000.” The Restructuring Board has so far responded to Jamestown’s requests for $613,000 to replace 25 percent of all city street lights with new, energy efficient LED lighting and $58,000 to work on consolidating the City and BPU auto fleets for significant savings.

Typically, such important upgrades and adjustments would have to await new taxation or high interest borrowing, also to be paid by new taxes. “Although our first applications took 3 long years to get through, this is one silver lining for our budget planning,” Bellitto said.

By definition, for a Fiscally Eligible Municipality to qualify for Board services and assistance, the Board considers the average, full value property tax rate, the average fund balance percentage, and any other criteria that the Board deems relevant.

The Tax Trap
“I’m trapped in my home,” one Jamestown small business owner told the Gazette. “I’ve worked hard for years. But now that I am successful enough to move up to a better home, I can’t do it. I simply can’t afford to move. I’m trapped. The taxes can be as high as, or even higher than, the mortgage. Something’s got to be done.”

Similar comments were heard from business owners in search of new facilities for their growing businesses. The local tax burden appears to be anti-growth and is apparently seen by many as a perverse incentive to leave the region and the state.

A random, though admittedly unscientific, sample of business owners and local residents yielded many similar opinions in a range of variations.

“I agree our taxes are high,” Council President Rabb said. “But in Jamestown we get an unusually good return on our investment in terms of the quality of life we enjoy here. We do get a lot for our taxes. People do want to move here. I came here for a job nearly 30 years ago and I stayed because it became my home. There’s no place else I’d rather live.”

“One of the major problems in Jamestown,” Rabb admitted, “is that so much of the city’s budget is derived from taxing the property owners.” He described this as a “structural flaw” in the tax system imposed by New York State law. “Renters do not contribute in this way. Residents who have sold their homes for conversion to rental units, therefore, contribute to the problem. Renters consume city services disproportional to the property taxes paid by the property owner.

Healthcare, Pensions and Lost Aid
There is an apparent consensus among City Council members about which expenses cause the greatest drain on the city taxpayers.

“First, the State of New York heavily cut state aid about 10 years ago,” Sheldon said. “Then they capped the city’s ability to recoup what the state took away. We are burdened with unfunded mandates for services we must provide but are hard pressed to afford.” The cumulative cut in Jamestown’s state aid has now reached more than $3,000,000 according to Comptroller Bellitto.

Some have quipped – not entirely in jest – “We’re merely a branch office of the government in Albany with little authority to manage our own affairs.

“Then there was the ‘Healthcare for Life’ package, negotiated in 1986, often in lieu of annual raises during their working years, for city retirees,” Dolce explained. “That was long before anyone could have foreseen the skyrocketing future costs of healthcare. But now the chickens have come home to roost.”

A state funded plan, not yet fully formulated or approved in Albany, proposes a buyout of those plans and full conversion to Medicare and private insurance. “We’re not sure how many retirees would see that as acceptable, though, but we’re working with the state to investigate it,” Dolce said.

George Spitale, City Council member at large, a longtime champion of labor and a retired Jamestown BPU employee, sees the large number of tax exempt entities as problematic for Jamestown tax payers.

Some tax exempt entities do remit a PILOT (payment in lieu of taxes) to the city, but those are voluntary and rarely match the waived taxes. These include non-profits, religious organizations, federal offices and facilities, certain agricultural properties and more. Spitale does not debate many of these are worthy exemptions, but he is concerned that their proliferation could be better regulated.

“I especially want to help the elderly on fixed incomes,” Spitale said. “That’s why we are all working on tax relief.”

“We knew pensions were expensive, though surely earned through many years of faithful service, but a few years ago we changed pensions to the new state Tier-6 system which shares and reduces certain costs.” This applies to the Police and Fire Retirement System (PFRS) and the Employees’ Retirement System (ERS) benefits.

Two more Questions
The following common questions concerning tax caps are answered in accordance with the New York State Division of Taxation and Finance.

Q: Does the property tax cap affect property tax rates?

A: Tax rates cannot be changed in any way that would raise the total amount of property taxes —the tax levy — above the cap. Localities cannot get around the cap by manipulating rates.

Q: Can I expect my own tax bill change at the same rate as the levy?

A: The cap will limit growth in your tax bill, but the specific level depends on assessments. A locality cannot circumvent the tax cap simply by manipulating assessments.

Urgent Call
Mayor Sam Teresi has scheduled the public budget meeting to discuss, answer questions and invite suggestions, ideas and solutions for the 2017 Spending Plan, and especially to find ways to avoid requesting the property tax cap override from the state.

The meeting is scheduled for Monday, November 7 at 9:00 a.m. in the Municipal Building’s 4th floor Training Room. Attendance is urgently needed.

Jamestown City Council

Gregory P. Rabb – At-Large

Ward Council Members
Brent Sheldon – College Ward I
Anthony Dolce – Lakeview Ward II
Victoria James – Chadakoin Ward III
Marie Carrubba – Bergman Ward IV
Maria B. Jones – Forest Ward V
Tom Nelson – Willard Heights Ward VI

City Council At-Large
Kimberly A. Ecklund – At-Large
George S. Spitale – At-Large

To contact Council Members directly see:

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Walt Pickut
Walt Pickut’s writing career began with publishing medical research in1971 while working at the Jersey City Medical Center and the NYU Hospital and School of Medicine. Walt holds board registries in respiratory care and sleep technology as well as bachelor's degrees in biology and communication, and a master's degrees in physiology from Fairleigh-Dickinson University in New Jersey, with additional graduate work in mass communication completed at SUNY Amherst. He currently teaches Presentational Speaking in the Houghton College PACE program at JCC and holds memberships in the Society of Professional Journalists and the American Society of Business Publication Editors. He lives in Jamestown with his wife Nancy, an MSW social worker, and has three children: Dr. Cait Lamberton in Pittsburgh, Bill Pickut, a marketing executive in Chicago, and Rev. Matt Pickut in Plymouth, IN.