ITHACA, NY – On Monday, Ithaca Mayor Svante Myrick provided some details on the proposed budget for Ithaca in 2017. Here are the key takeaways:
1 – Tax levy up, tax rate down
The city’s tax levy — the total amount the city will collect in taxes — will increase by 1.98 percent. Meanwhile, the tax rate — the percentage of assessed property value each taxypayer pays — will drop by 6.6 percent, from $12.89 per $1,000 to $12.04 per $1,000 (an $0.85 decrease). The tax rate is the lowest in 16 years, according to the mayor.
Overall, this means that while the city will have a bit more money to work with this year, many people will see a decrease on their tax bill.
According to the mayor’s presentation, more than half of single and two-family homes will see a small tax bill decrease. The median change for this class of homes is a decrease of $2.85. This reflects the change for a house that was assessed at $145,000 in 2015 and $155,000 today. Properties that saw a larger increase in assessment, may not see the same savings, while properties that held the same assessed value or decreased will see more savings.
The mayor attributed the reduction to a three-part strategy: aggressively pursuing and utilizing state and federal funding, lowering costs by improving efficiency, and growing the tax base through smart new development in the city’s core.
In particular, new development increased the land value in the city by ten percent in the last year, most of which comes from new apartments in downtown and Collegetown. Since single and two-family homes in Ithaca are a relatively smaller share of overall taxable value in the city, the city is able to draw more of its tax revenue from new developments and homeowners end up paying less or seeing only modest tax increases.
2 – Where’s the money going?
Here’s a rundown of the major changes to services to city services included in the 2017 budget:
- Four new firefighters (funded through a SAFER grant)
- New Deputy Fire Chief position starting in December
- $1 million increase capital projects for street reconstruction
- new assistant Chief Water Treatment Plant Operator position
- New city planner position starting in September, to help ease backfill from two recent retirements
3 – Projections
The mayor’s presentation also looked to the future, laying out a 15-year projection for future revenues and expenditures.
The city is projecting five percent annual growth in health insurance expenditures and one percent growth in salary expenditures along with a 0.7 growth in sales tax revenues.
Specifically, health insurance costs will grow from around $9 million a year today to around $20 million after 2030. Salaries will grow from $23 million to around $27 million. Sales tax revenues will grow from around $13 million to a little over $15 million in that same time frame.
As sales tax is a major source of revenue for municipalities, slow growth in sales tax often means the revenue needs to be made up in property taxes. The mayor’s report predicts a three percent annual increase in property tax to keep pace. How much each individual homeowner pays may change at a different rate, depending on how value assessments fluctuate with new development and other factors.
Now that the mayor has proposed the 2017 budget, the next steps will involve Common Council debating the specifics of the budget during meetings over the coming month.