Sep. 4—The Oneonta Common Council discussed the role of the tax cap, sales tax numbers and the state of the city’s general fund at the Tuesday, Sept. 3 meeting.
Mayor Mark Drnek said that the discussion was to determine three numbers to present to city department heads so that they can prioritize their budgets and come back to the council by Oct. 15.
“My theory is if we are looking to lower the tax cap, which is what people are telling me,” Scott Harrington, R-Sixth Ward, said, “then I am not in favor of a 10% tax increase. We are going to have to make a lot of hard decisions.”
“We are probably going to have to look at assessments again and people are begging for mercy,” Harrington added.
Currently, the tax cap in Oneonta is 2.2453%. The tax cap, which was enacted by the state legislature in 2011, established a limit on the annual growth of property tax levies by local governments and school districts to 2% or the rate of inflation, whichever is less, and it allowed for a tax base growth factor determined by the state.
Discussion centered around building a budget up to the tax cap.
“If you go above the tax cap, you can’t change it and need a local law if you want to exceed it,” City Attorney Dave Merzig said.
The consensus of the council was to stay at the tax cap and see what the departments come back with.
For the sales tax, the city of Oneonta has an agreement with Otsego County whereby the county shares 12% of the sales tax collected with the city.
“In preparing projections for the ensuing year, we study history and trends to determine a conservative estimate,” Finance Director Virginia Lee said.
“My recommendation for 2025 is to budget $5,800,000 in sales tax, an increase of $400,000 from 2024,” Lee said.
The council concurred with this estimate.
Several questions came up regarding the city’s general fund, including the sales of the Asa C. Allison Jr. Municipal Building, often referred to as the Armory Building at 4 Academy St., and 27 Market Street.
Cecilia Walsh-Russo, unaffiliated-Second Ward, asked if the sales of these two properties would have an impact the general fund.
Shannon McHugh, D-Third Ward, asked where the money would be coming from for the repairs to the city’s Public Safety Building and the additional police officers and firefighters being hired in terms of how this would affect the general fund.
“When we do sell 27 Market St.,” Lee said, “it would be put back into the budget. The Armory would be a different thing, because the expense for the Armory would go away.”
Current expenses for maintenance on the Armory is $108,606 annually.
Last week, Lee presented to the council year-end projections for 2024 with the current staffing as of Aug. 27.
“Currently, we have vacancies that we are trying to fill within various departments, including the police and fire department,” Lee said. “If indeed we do hire and fill these vacancies during 2024, the projections that I presented last week will change, decreasing the small surplus projected, due to the increase in expenditures with the new hires.”
The 2025 general fund draft budget will be presented with two options — one appropriating $1.8 million into general fund to assist in funding expenditures and the other with no appropriated funds.
In eliminating the $1.8 million in the general fund budget, extensive study and analysis will need to be done to determine how to achieve such a reduction in services, Lee said.
Kathleen Gasperini, staff writer, can be reached at [email protected] or 607-441-7206.
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