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ROTTERDAM
Town faces drop in tax revenues Sales, mortgage receipts down from ’07
BY JUSTIN MASON Gazette Reporter

    Pronounced declines in Rotterdam’s share of the county sales tax and a marked decrease in mortgage tax receipts are starting to have an impact on town coffers.
    Comptroller Patrick Aragosa said Rotterdam is receiving about $23,000 less per month than the town was allotted by Schenectady County the previous year. He said the decrease in revenue is throwing a wrench into the 2008 budget and is likely to prompt town offi - cials to tap the town’s $3.5 million fund reserve this year.
    “We’re off,” he said. “We’re getting a smaller cut this year.”
    Aragosa said Rotterdam received $211,000 per month in sales tax in 2007. In contrast, he said the town was allotted $187,000 per month when county officials released the sales tax apportionment in January.
    “But it was too late at that point,” he said. “Our budget was already set.”
    Sales tax revenues are one of the town’s primary revenue sources. Schenectady County guarantees $7.7 million in sales tax revenue to be divided among the towns of Glenville, Rotterdam, Niskayuna, Princetown and Duanesburg, as well as the villages of Scotia and Delanson. The city of Schenectady has a separate sales tax agreement with the county.
    Each town or village receives its guaranteed share proportionate to the full value of its property. Municipalities with a greater total property value receive a larger percentage of the sales tax.
    County Finance Commissioner George Davidson said Rotterdam’s cut of sales tax revenue could have dropped only because the town’s property didn’t increase in value at the same rate as other municipalities in the county. Without an equal or greater growth total valuation, he said, Rotterdam’s percentage of the sales tax revenue would dip.
    “If that value was less in relation to all the other towns the year before, that’s the only way they would have gone down,” he said.
    Prior to last year’s revaluation, Rotterdam had an equalized value of $2.32 billion, according to the state Office of Real Property Services. This value increased to $2.51 billion in 2007 and $2.63 billion in 2008, for a total increase of about 4.7 percent.
    Property in all of the county’s towns and villages was valued at about $6.12 billion in 2006. This figure jumped to $7.27 billion in 2007 and $7.66 billion in 2008, an increase of about 5.2 percent.
    Proponents of last year’s revaluation in Rotterdam argued the town wasn’t receiving its fair share of the sales tax revenues because its properties were assessed on a fractional basis. By bringing the town’s equalization rate up to 100 percent, they argued underassessed properties in the town would be brought to full value, thereby allowing Rotterdam to collect a greater percentage of the sales tax revenue.
    Instead, the reassessment appears to have had either a negative or negligible effect on the apportionment. Aragosa said the town is now trying to get to the bottom of the shortfall.
    However, Davidson said fluctuations in the sales tax apportionment aren’t uncommon from year to year. While admitting these fluctuations can cause budget problems for local officials, he said Rotterdam’s sales tax shortfall will likely be balanced by the town having to pay less toward the county’s property tax levy.
    “From a residential standpoint, it probably works out better,” he said.
    Meanwhile, Rotterdam officials will also need to contend with the cooling Capital Region housing market, which has prompted a downward trend in mortgage tax receipts. Aragosa said the town is short about $75,000 in budgeted mortgage tax revenue.
    Overall, Aragosa said the town budget anticipates $753,000 in mortgage tax for the year but has collected only $350,000 over the first two quarters of 2008. This figure is significantly less than the $465,000 collected during the first two quarters in 2007.
    “We’re at a tough spot,” he said.

A tough spot indeed…like every other level of government has told us this week.  Though I believe we’ll navigate it ultimately (we don’t really have a choice anyway), the underlying problem is one I’ve mentioned before.  Rosy forecasting which leads to poor budgeting.  In my opinion, there is no excuse for the budget being too optimistic.  Talk of recession, credit woes, housing slump, etc. pre-date the adoption of the budget.  It isn’t rocket science to figure out that if things are slowing down, you don’t forecast expansion of revenues, especially when revenues have been driven by consumer spending and a healthy real estate market.

I’m somewhat gladdened by the economic crushing because the effect, as you’re beginning to hear from people like Gov. Patterson, is that cuts will have to be made and spending reduced.  Revenue streams drying up drastically and simultaneously is the only language government remotely understands to contemplate fiscal restraint.

I guess I don't totally understand this.  I would think that the amount of sales tax revenue that a municipality (town/village/city) receives should be (notice I'm not saying approximately) equal to the amount of sales tax that is collected in that municipality.  Now, I realize that this would significantly swing the tax money to probably have most of the money go specifically to the main business areas of the county, Schenectady, Rotterdam and Niskayuna.  The next would most likely go to Scotia / Glenville, then places that decide that they want to stay rural / outlying will see less of an income from this money, something they should expect, as it would then not be a redistributon of taxes, just a collection and return of taxes to those that paid them.  If they want more sales tax revenue, they should bring in more business.  Since I realize this would change this so much, you would also have to realize that I would expect for everyone to be on an equal evaluation basis (100%), and the property taxes at the county level, after paying for services at the county level, should be returned to the lower municipalities for use in their areas.  This may increase the amount that is collected from these other municipalities (in realtion to the sales tax amount) and that will be where the localities get their income.

I am in agreement with you. But from what i was told, all of the counties sales tax revenues gets put into ONE general fund...so to say. And because of that, how do we (Rotterdam) know if we are actually getting our fair share back?

We don't, because we (a town with a Republican majority on the board) have to bow down to the County Legislature (a strong Democrat majority) to get anything at the county level.  We're pretty much left on our own.

now we might have to put the demos in to get any results for our seniors.

Quoted from 191

now we might have to put the demos in to get any results for our seniors.

seniors???? do you mean old folks??? why do they get special treatment??? there's a shaky podium built by politicos.....like it's new that we get old or something, and they are the only ones who care about the 'old folks'.......keep the responsibility in the families.....the government should never take on what is not theirs.....

maybe the 'seniors' should take their money and put all under the AARP and then demand that AARP build their housing, get their drugs, groceries, heat etc......and then maybe AARP will get off the governments back.....then we can deal with the other bullying lobbyists......

the money required for the care of the boomers will get sucked out of the system and the illegals will take care of them.....

Quoted from 191

now we might have to put the demos in to get any results for our seniors.

What are you talking about? I don't understand. What results are you referring to?