ITHACA, NY – On Tuesday, the Tompkins County Legislature approved spending goals for the 2017 budget, approving up to a three percent increase to the county’s tax levy.

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The county administrator’s office estimates that the owner of a median-valued $170,000 county home would pay a little over $34 in additional taxes if the three percent increase goes through. This will raise an additional $1.4 million for the county.

A three percent increase would bring the tax levy increase above the New York State-mandated tax cap of approximately 2.49 percent.

What this means, for the average property owner, is that they won’t be entitled to the “tax freeze credit,” which is a rebate doled out by the state that covers any increase in property taxes. The tax freeze credit only applies if the taxing municipality stays under the tax cap.

Of course, as previously reported in The Voice, Tompkins residents might not have qualified for it anyway, due to a fluke in the way the program is designed.

It’s worth noting that this is the very beginning of the budgeting process. County Administrator Joe Mareane informed the legislature that if the county’s financial picture improves, then the tax levy may be lowered. The final budget proposal won’t be ready until this fall, and voting on it will take place near the end of the year.

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Why the increase?

By far the biggest driver behind the projected tax levy increase is a lack of sales tax revenue. Four out of the last five fiscal quarters saw a decrease in sales tax income for the county, including the first quarters of both 2015 and 2016. It’s projected that 2017 sales tax revenue will fall short of 2016 numbers by about $860,000.

What’s driving the sales tax income down? That’s a question without an easy answer. What was assumed last year to be a fluke has turned out to be a worrying trend.

“It’s maddening becuase there’s not a great deal of data to tell us what’s happening,” says Mareane.

He explains that the prevailing theory is that since gasoline and energy costs are down, less sales tax is collected from those major costs. However, what’s still a mystery is why people aren’t spending the money they are saving on those costs elsewhere.

“We are lagging behind the rest of the state, so our decline really puts us at the bottom of the heap,” Mareane explained. “You have to wonder if part of it is that we’re doing smart things — we’re taking our savings and we’re paying down student debt or paying off credit cards… things that don’t generate any sales tax revenues. That’s the best theory we can come up with.”

Compounding the issue is the fact that 2017 calls for the county to pay for negotiated wage growth for many county employees.

It’s not all bad news. While it’s not enough to offset the other deficits, Mareane points out that the county has been saving money due to the health care plans it instituted. Tompkins has also saved a few hundred thousand dollars in human services costs.

“The good news there is that people are becoming less dependent on some of the human services we provide, as the economy improves, people are becoming more self-reliant and that means our human services cost can go down a bit.”

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Michael Smith

Michael Smith reports on politics and local news for the Ithaca Voice. He can be reached via email at msmith@ithacavoice.com, by cell at (607) 229-0885, or via Google Voice at (518) 650-3639.