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Serving the communities of Massena and Potsdam, New York

Massena, Potsdam village boards vote to override lax levy cap

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MASSENA - The village boards in Potsdam and Massena passed measures last week allowing an override of the 2 percent tax cap, if necessary. when they develop their spending plans for 2013-14.

Massena Mayor James F. Hidy called the motion a “safety net” in case the village board has to raise the property tax rate beyond 2 percent in their 2013-14 budget. The board will be reviewing the village’s budget and projected tax rates in the coming weeks. The village’s fiscal year runs from June 1 to May 31.

“We strive to stay below the 2 percent tax cap. (But) this allows us to override the tax cap if the village needs to raise taxes for an unforeseen reason,” Mr. Hidy said.

The village of Potsdam’s Board of Trustees also voted last week to override the the state’s 2 percent tax levy limit. Potsdam Mayor Steven W. Yurgartis said the override was a precautionary measure to ensure the village didn’t inadvertently break the tax levy cap.

The law requires the local governments and school districts to raise taxes no more than 2 percent or the rate of inflation, whichever is less, according to the state’s Department of Taxation and Finance website.Local goverments can override the tax cap if they have the support of 60 percent of the board.Mr. Yurgartis called the tax levy cap a “misnomer,” noting the tax levy cap is not actually 2 percent. The actual tax levy cap is based on a number of factors, including growth of the local tax-base, exemptions on contributions to retirement plans from the following year and future revenue from payment in lieu of taxes (PILOT) programs.

“It’s a complicated formula (for determining the tax levy) - so complicated that even the comptroller’s office has trouble explaining it,” Mr. Yurgartis said. “(And) if we were to exceed the cap there will be some serious penalties.”

Mr. Yurgartis would like the village to avoid any increases in the tax rate, but he noted the village is in dire fiscal straits, facing rising costs for pensions and health care.

“We just got started on this year’s budget process. We’re looking at a pretty difficult fiscal situation, but we want to keep tax rates flat,” Mr. Yurgartis said. “I can’t make any promises (on the tax rate).”

Mr. Hidy believes the village of Massena is in a strong enough financial position that a tax rate hike won’t be necessary. He pointed out this has so far been a relatively mild winter, compared to year’s past, which has saved the village on salt and running plows.

“I think we’re in good shape, but we’ll have to see the department’s (proposed) budgets,” Mr. Hidy said.

Last year, the Massena Town Council increased its property tax rate by 29 percent for property owners in the town inside the village. But Mr. Hidy believes the village is in a stronger financial position than the town and said an increase of that size will not be necessary for the village. He thinks some of the town’s financial woes are a result of the state no longer providing gaming compact money that it received from the state from revenues generated at the Akwesasne Mohawk Casino.

“I think the town relied on the gaming compact money, and with that money not being there anymore it put them in a precarious situation,” he said.

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