Colonie supervisor proposes one-time tax to pay down deficit Thursday, April 10, 2008 By Jill Bryce (Contact) Gazette Reporter
COLONIE — Town property owners may have to pay an average of $250 on top of their other town taxes to help the town bridge an estimated $18 million deficit. Town Supervisor Paula Mahan has proposed a "one-time eficit correction tax" on all residential and commercial property to end the financial crisis in town. There are an estimated 30,000 households in town. The bill would be based on the assessed value of a home, and the projected average bill would be $250. The tax would be based on a sliding scale, and individuals with higher-priced homes would pay more while those on fixed incomes would pay less. The mechanics and legal issues are still being worked out, and the measure still must be approved by the Town Board. Mahan, who held a news conference this morning at Town Hall, said the bill would not be due until this fall or later. The proposal is the latest emergency measure being considered by Mahan and the new town administration to bridge the looming deficit. Mahan said that she has heard from many town residents who tell her, "Why don't we just bite the bullet and get it done in one shot?" If the proposal is passed and Heritage Park is sold for an estimated $2 million, the deficit would be wiped out, Mahan said. "In 2009, we would not have to raise taxes," said Mahan, a Democrat who was elected in November when she upset incumbent Republican Mary Brizzell. Mahan said the other alternative is a 25 percent property tax increase for 10 years, and she said she refuses to burden the town residents with that level of taxation. The Town Board is expected to meet tonight to discuss the proposed one-time tax. The town is also asking the state Legislature if it can pursue deficit financing, which gives the town authorization to borrow to cover the deficit. Mahan said this is a safety net.
I couldn't believe this when I read it. It was on the news tonight and the residents in Colonie are so angry. From what they said on the news, this practice has been done in other communities in NYS, and you are right Kevin, it is proven to never just be ONE TIME.
Fair tax for Colonie First published: Friday, April 11, 2008
Colonie Supervisor Paula Mahan's plan to deal with the town's $18 million deficit at first appeared to be carefully designed to avoid any large, painful tax increases. That was understandable. Any significant tax increase would have invited Republicans to criticize her as a tax and spend Democrat. But now that she has unveiled her plan for a one-time average tax boost of $250 on all homeowners and businesses, such criticism is unfounded. The surcharge is fair and balanced. What's more, it is unavoidable, given the fiscal mess that she inherited from the Republican administration that pushed the town to the brink of crisis. Colonie is a booming suburban town with a $5.6 billion tax base. It should be enjoying surpluses. Yet it is $18 million in the hole, largely because town taxes were held to artificially low rates for years. Now that it is time to pay the piper, the blame belongs squarely on Republican shoulders. The one-time tax increase, which will be applied on a sliding scale according to assessed valuation, combined with the expected sale of the town's share of Heritage Park for $2.7 million to Albany County, will go a long way toward balancing the town's books. Viewed strictly as a percentage, a $250 surcharge amounts to about a 50 percent increase in the $550 tax bill paid on a house assessed at $200,000. But that $550 is a bargain. Had the town been more fiscally responsible in past years, that $550 would have been gradually increased to cover rising expenses. Earlier in the week, Ms. Mahan outlined a 10-year plan that largely relies on borrowing to extend some $16 million in short-term debt by October, or rolling over the debt into long-term bonds. That plan will still go forward, but there are obstacles to face. For one thing, at least one Republican member of the Town Board would have to join with board Democrats to approve the plan. That's far from certain. For another, the credit markets have been showing signs of growing anxiety over Colonie's financial situation. Beyond that, Ms. Mahan says her staff is exploring options such as cutting the capital budget in half, consolidating services and raising employee health care contributions. Will a $250 surcharge make anyone think twice about living in Colonie, or doing business there? Not if the example of Troy is any indication of what happens when a locality has to raise taxes to avoid financial disaster. In 1995, the city was $3 million in the red and on the verge of bankruptcy. But a new mayor, Democrat Mark Pattison, had the courage to see through a 21 percent permanent tax increase. Today, Troy is on the rebound, largely because its financial house is in order. Colonie is still one of the more prosperous communities in the Capital Region. But that might not be the case for long if it fails to quickly and erase its deficit. THE ISSUE: Colonie residents face a one-time tax of $250. THE STAKES: The town's deficit requires tough measures.
EDITORIALS Mahan plan best way to deal with Colonie deficit
Colonie Democratic Supervisor Paula Mahan, saddled with an $18 million deficit by her Republican predecessor, could deal with the problem in a number of ways, none of them particularly appealing. The method she’s chosen — a special, one-time tax assessment averaging roughly $250 per residence and business — is probably the best. The town could ignore the deficit and continue conducting business as usual. That’s basically how it got into trouble in the first place. But the town’s credit rating would suffer, and it would have to pay more to borrow. A second option would be to borrow the money; but the town would need the state Legislature’s permission for that. To get it would also require a super-majority of the town board, which is 4-3 Democratic. Getting even one of the Republican members to go along might not prove very easy. And borrowing is never a wonderful option, especially for operating expenses; in the long run, it costs a lot more money to service the debt, and makes borrowing for valid capital expenditures more costly. In the current credit crunch on Wall Street, the town needs to borrow as little as possible or face ruinous debt service costs. A third option — raising the town’s tax rate roughly 25 percent for 10 years — would be equally painful. Yet another option would be Draconian personnel cuts, but that would not only be unfair to many employees, it would leave the town without essential services. Mahan inherited a mess — even if long-term landfill expenses aren’t factored into the equation, as Republicans insist they shouldn’t be. According to a recent state comptroller’s audit, it was from years of Republicans spending more than they collected, raiding the landfill fund, using sales tax revenue and borrowing to pay for daily operations. Mahan wasn’t part of the government that created that mess and she shouldn’t be held accountable for it. The best way for the town to deal with it, and the fairest for her, is to bite the bullet and get it over with.
Colonie tax may come in January One-time deficit-cutting assessment needs approval from the state Legislature to be collected earlier
By JORDAN CARLEO-EVANGELIST, Staff writer First published: Wednesday, April 16, 2008
COLONIE -- Town leaders said they'd be willing to wait until January to collect a proposed one-time tax designed to erase a multimillion-dollar deficit. They may not have a choice.
Levying the midyear "deficit correction tax" -- which officials said would average about $250 for homeowners -- would require special state legislation, spokesmen for the state comptroller's office, Assembly and town said Tuesday. Without it, the town would have to wait to add the tax to its January annual bills, which would only require the approval of a majority of the seven-member Town Board. Officials earlier said they hoped for a fall tax collection, if they decide to go forward. Because Supervisor Paula Mahan, a Democrat, wanted to move quickly in hopes of restoring Wall Street's confidence in town finances before October when $16 million in short-term debt comes due, the news may be a setback. The Legislature will likely break for the summer in late June. Even if time were not a factor, it's uncertain that the Democrat-led Assembly or Republican-led Senate would approve the measure when the Town Board appears divided along party lines over whether the tax is a good idea. Residents' reaction has so far been mixed. Many have expressed their displeasure, at the same time acknowledging it may be necessary. Mahan floated the idea last week and got a cold response from the three-member GOP minority, which called it a "terrible idea" and proposed its own plan it said would generate a surplus with little or no tax increase. Democrats are skeptical of the numbers used in the GOP plan, among them a deficit figure of $14.7 million. Mahan uses a February state comptroller's office audit to peg the number at $18 million. Peter Gannon, Mahan's director of operations, said Tuesday that officials were aware from the beginning that the plan might require some sort of state legislative green light -- though that possibility wasn't mentioned at a public meeting last Thursday at which Mahan discussed the tax. Gannon acknowledged the need for approval could affect the town's timeline and said officials have yet to even decide whether to pursue the tax. He said completing the process correctly was a higher priority than getting it done quickly. Even if the town cannot collect the money until January, Gannon said including it in next year's budget, with ongoing cost-cutting measures, may be enough to show Wall Street the town is making efforts to stop its overspending. "Ideally, we'd like wire transfers here by Friday, but that's not going to happen," Gannon said. "This is a significant endeavor that we're taking with the taxpayers here in town and we want to make sure it's done properly." He said the town is preparing to meet with state lawmakers, including Democratic Assemblyman Robert Reilly, in the coming weeks. Calls to state Sen. Neil D. Breslin, a Democrat who represents Albany County, and Republican Senate Majority Leader Joseph L. Bruno of Brunswick were not immediately returned Tuesday. Reilly's office said it was premature to comment on the proposal until it is formally presented. Jordan Carleo-Evangelist can be reached at 454-5445 or by e-mail at jcarleo-evangelist@ timesunion.com.
This 'appears' to be a one time fee only. A necessary fee that the dems say are necessary because of poor fiscal management by the past administration of the reps.
But I do have to say that there are some people that I know who live in Colonie and their taxes are CHEAP in comparison. They have told me that they would not move from Colonie cause their taxes are so low.
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
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