SCHENECTADY COUNTY Mortgage tax receipts decline Two towns expecting to have surpluses BY MICHAEL LAMENDOLA Gazette Reporter
Unlike Schenectady County, its two largest towns budgeted conservatively for mortgage tax receipts this year and did not see their finances affected by the widely publicized downturn in the housing market. Rotterdam and Glenville comptrollers said they usually budget their mortgage taxes receipts conservatively, based on local trends, rather than on county projections. As a result, both expect to have mortgage tax surpluses at the end of the year, which will provide them with a financial cushion. County legislators, on the other hand, increased projected mortgage tax receipts and sales tax projections for 2007 when they fashioned the final budget last year, part of an effort to offer a property tax decrease. Both projections fell short: The county collected $2.3 million less in sales tax and $300,000 less in mortgage tax than projected. The resulting $2.2 million revenue gap in the 2008 budget forced legislators to cut $3 million from the budget to reduce a projected 10 percent increase in the property tax levy to 4.9 percent. County Legislator Philip Fields, D-Schenectady, chairman of the Legislature’s finance committee, said majority Democrats, who increased the revenue projections, did not over-estimate sales and mortgage taxes for 2007. “We had certain expectations about growth in the economy that did not materialize,” he said earlier. The county places a fractional charge on all mortgage recordings, whether they be for new home purchases or on home refinancings. This generates $1.25 per $100 of a mortgage. Schenectady County Deputy Finance Commissioner Debbie Mancini said last year the county collected $10,921,341 through the fee. This year it collected $10,316,769. Schenectady County Clerk John Woodward said the “mortgage market was in good shape for a long time but then it slowed down. We are obviously collecting less.” Rotterdam Comptroller Patrick Aragosa said the downturn in the housing market affects town finances. “When the market goes down, people tend not to buy houses and refinance houses, and that is all tied to these revenues,” he said. Aragosa said Rotterdam budgeted conservatively when projecting mortgage tax receipts for 2007. He budgeted $625,000; the town received about $924,000. Likewise, Glenville Comptroller George Phillips said the town will receive some $800,000 in mortgage tax receipts for 2007; it had budgeted $750,000. “We will make the budget,” he said. Both towns use mortgage tax receipts for general operations, and to over-estimate them would create gaps in their annual budgets, the comptrollers said. “I am more conservative than the county, that is my style,” Aragosa said. “I would rather be pleasantly surprised than be disappointed and then be scrambling to make ends meet.” Because of the housing market’s volatility, Aragosa said he does rely on mortgage tax receipts to balance the town’s budget. “There was too much reliance on that number before I got here 10 years ago, and I have tried to bring down reliance on it and not use it to balance budget,” he said. Phillips said, “It’s kind of hard to project. It was our best estimate for the next year, and it was conservative.” Glenville does not have the luxury to “budget aggressively,” hoping to fill revenue gaps with its fund balance, as the county does, Phillips said. After the city, Rotterdam saw the most growth in mortgage tax recordings. Aragosa said the town “is an area that has desirable housing and a desirable tax base and it continues to be on radar screen for people.” The county distributes mortgage tax receipts four ways: 50 cents of the $1.25 goes to municipalities in the county; 25 cents goes to the county; 25 cents goes to the Capital District Transportation Authority; and 25 cents goes to State of New York Mortgage Agency, Mancini said. The county distributes the fee semi-annually: Once after a collection period between October and March, and again after a collection period between April and September. A comparison of mortgage tax distributions to municipalities for the six-month period of April-September 2006/2007 follows: Delanson, $4,000 in 2006; $2,965 in 2007; Duanesburg, $120,000 and $101,000; Scotia, $52,000 and $49,000; Glenville, $496,000 and $472,000; Princetown, $37,000 and $51,000; Rotterdam, $535,000 and $478,000; City of Schenectady, $641,000 and $521,000. Totals were $2.3 million in 2006 and $2.2 million in 2007. The county collected $2.02 million in mortgage tax receipts in 2007, $300,000 less than budgeted.
Way to go, Mr. Aragosa! They should be giving you the raise - you'd be earning it.
My sentiments exactly!!!!!!!!!!!!!!!
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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