AREA NEWSThe Northern Westchester Examiner

5.9 Percent Tax Increase Possible in Peekskill

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Peekskill City Manager Rick Finn
Peekskill City Manager Rick Finn

Despite New York State lawmakers passing the 2 percent cap on the tax levy, Peekskill administrators realized that the municipality can actually increase its levy by almost 4 percent additional because of the exclusions incorporated into the law.

There are three areas that the law permits a municipality to increase its levy by more than 2 percent, according to Peekskill City Manager Rick Finn. The three instances are: if a legal settlement makes up more than 5 percent of the tax levy; if the levy is increased because of local government consolidations; or if pension growth is more than 2 percent.

Peekskill can consider two of the exclusions—the legal settlements and the pension growth, Finn said at a special Common Council meeting on Monday, July 25. In 2011 the city settled $1.8 million in tax certiorari settlements.

“We could use the 2011 tax certiorari to increase the tax levy through the exclusion clause,” said Finn. “We can increase it because the tax certioraris are considered a legal settlement and total more than 5 percent of the levy.”

Of the $1.8 million settled, $1.18 million or 1 percent of the tax levy would be exempt, Charles Emberger, city comptroller, stated. With a projected pension rate increase of 25 percent, he also estimates that the city would be permitted to increase the tax levy by 2.9 percent because of the $848,877 increase in retirement contributions.

Finn explained to the council members that the administrators have begun the budget process and that there was currently a $3.4 million shortfall in between the projected revenue of 2012 and the estimated expenditures. No salary increases were involved in the preliminary figures. The increase Finn noted is from an anticipated rise in mandates or contractual obligations.

In addition to trying to find methods to cut expenses, the city administrators recommended finding other means of generating revenue that can help offset the tax levy.  Ideas ranged from having a separate fee for garbage pickup, increasing recreation fees to using money in capital fund accounts to pay down debt service.

In 2010 the city was able to make through the year without having to spend money in its fund balance.  The city instituted a hiring freeze in July and has asked departments not to spend any money that is not needed to provide ongoing service. Finn hopes that by taking the precautionary measures the city will once again be able to refrain from using monies from the fund balance.

“We are actually in good shape for 2012,” said Finn. “What concerns us is 2013.”

Finn stated that in the coming weeks he would like to have another meeting with the council to hear their feedback on some of the budgetary proposals. A meeting date has not been set as of press time.


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