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One of the obvious impacts of the COVID-19 pandemic is that when people stay at home, they're not shopping. That has the consequences for municipalities that sales tax revenue goes down. In the Town of Lansing reduced sales tax revenue has the greatest impact on the Highway Department, which gets a large chunk of its annual budget from 80% of the Town's sales tax revenue. At this month's Town Board meeting Councilman Joe Wetmore expressed concern that in the wake of an estimated 30% reduction of sales tax revenue, that the Town should think about cutting projects anticipated for this year.

But Supervisor Ed LaVigne countered that the Town coffers are in very good shape due to conservative budgeting and a fund balance policy that allows up to six months-worth of operating expenses. He said he has consulted with Highway Superintendent Charlie 'Cricket' Purcell, and they are keeping a close eye on revenues. LaVigne said Purcell has identified projects that can be put on hold if the money doesn't come in as expected, but he advocated a 'wait and see' approach, rather than cutting road maintenance and other projects that may not need to be cut.

"I realize that we're not getting as much money from the sales tax that we normally would. And this primarily affects the Highway and you're describing how we're going to have the Highway Department work on the water district. So we aren't relying on sales tax money for them. I'm just worried that we're going to get in the habit of having the highway, people doing other projects and fall behind on the highway work that needs to be done," Wetmore said.

LaVigne was reassuring, saying, "First of all, Cricket, won't let that happen. He won't take on a job if the highways are going to be sacrificed. He did that before and he was very successful when he did the Drake roadblock district."

The NYS State Comptroller's Office defines fund balance as," Fund Balance is the total accumulation of operating surpluses and deficits since the beginning of a local government’s existence." Essentially it is money that can be spent for things that come up that were not anticipated in the budget, including emergency repairs or special equipment purchases, for example, when the municipality can realize a significant savings by buying now, rather than waiting for the next budget year.

A fund balance policy determines what percentage of annual expenses can be kept in the fund balance. If the Town has more money it goes into one of a number of reserves, which are later used for planned purchases of equipment or services. While many municipalities call for three or four month's worth of operating expenses. In 2016, with $3million of spare cash in the own coffers, the Town Board passed Fund Balance and Reserve Policies that call for a conservative six months-worth of operating expenses. the Board discussed lowering it in the future if it turned out to be too conservative, but they never did. That gives Lansing a healthy cushion in case of disasters like, say, a pandemic.

LaVigne summarized the current financial picture, saying the Town receives monthly reports on sales tax revenues.

"Now that sales tax last year, the actual amount was $1,666,138.29," LaVigne said. "Our budget this year is $1,599,290. When you compare this year to last year, which is what we do, you have to understand that total budget this year is 4% less. Now you do these calculations of 4% less and you go through the first four months we are at a deficit of $465.11 cents. If you project for the fifth month, which is what I think Tompokins County is doing, of a 30% decrease in sales tax compared to last year of $124,225.98 for the month of May. That pushes our deficit this year to $36,073.72.

"When we had our B and our DB together at the end of the year, it was $1,187,618. That's the combined B and DB. The monthly amount is for each month, that's $141,897. So how many months of fund balance do we have sitting to one side as we collect sales tax? 8.37 months is how much we have. Consequently, when we look at that, we take out your six months that we've through our fund balance policy. So we need to set aside at 2.37, which gives us $336,295.89. That's how much we have in 'surplus' over our six months."

LaVigne also noted that mortgage tax is another revenue stream, and that the pandemic may not be as much of a factor on that tax revenue as you might expect. He said the budget estimates $250,000 in mortgage tax revenue. He noted that two years ago actual mortgage tax revenue was $539,866, and last year it was $213,736.99. The first two allocations this year came to $136,353.10, about $120,000 below the target number.

"You have to understand that that, in the the housing market, they may not be buying houses, but they're refinancing houses. Anytime you refinance the house, you're still paying mortgage tax. So once again, we're in a position where we can wait to see how things go before we propose cutting things back."

LaVigne said Purcell has a plan for what to do if Consolidated Local Street and Highway Improvement Program (CHIPS) money is cut this year, so while cuts aren't being made now, the Highway Department is ready with it's Plan B.

"I know we've just started to see the downward climb on (sales tax)," Wetmore said. And I've been watching the County predictions and I'm going to talk with Cricket some more and I'd like to talk some more next month because I think this is a year in which we have to keep very careful eyes on the budget because it's, it's all new ground for us. I agree that Lansing's budget situation is really good at the moment, and I want to keep extra care to keep it that way."

"We watch it every year," LaVigne replied. "And once again, we respect the taxpayers' money and we will watch this carefully. On the other hand, I don't see cutting services for our town. If somebody wants to come up with some suggestions to cut services I'll be more than happy to have that conversation publicly at our next meeting."

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