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After a surprise decision to lower the Town of Lansing tax rate by 44.15% in a preliminary draft of the 2012 budget last week, the Town Board met again Wednesday to iron out concerns about making such a drastic cut in taxes.  Three board members said that they will be more comfortable with a 33% cut, still a significant number.  Town Supervisor Scott Pinney and Councilman Robert Cree defended the number, saying that major reductions in expenses have not been matched by tax cuts, even though the tax rate has gone down for the past four years.

"It's a controversial number," Pinney said.  "It's a huge number.  There's a lot of concern by not only the residents, but by the Town Board itself."

Both Supervisor candidates, Kathy Miller and Connie Wilcox, as well as Marty Christopher said that 44.15% is too deep a cut.  They worried that taxes would have to go up after a few years, and that unexpected expenses might now be covered, as well as a general perception within the town that too much would be cut in one year.  Miller said she feared that any number of unexpected circumstances could raise the town's expenses.

"I just want to be sure that we don't get to the point, two or three years from now, where we have to raise taxes in order to keep that fund balance there," she said.  "I don't ever want to raise taxes.  I would rather lower them gradually than raise them.  It doesn't make sense to lower, lower, lower... oops!  forgot... we're going to raise them. I don't ever want to do that."

She also said that upcoming projects need to be covered including a new standalone sewer project, and developing a town center across the street from the Town Hall.  The declining of revenue from AES Cayuga power plant was another concern. 

Pinney replied that sewer was a big issue, because the failed project cost Lansing over a million dollars.  He said the map plan that the Board will consider in their October 26th meeting cost the town $15,000, which will be recovered if a sewer district is formed by fees paid by properties within the district.  He said even if the new sewer fails the town will only be out up to $50,000.  He said he favors industrial development in the Town Center, but does not think the Town should be the developer of an industrial park there as the Economic Development Committee suggested last month.  He said he thinks a private developer should take that risk.

Cree said his estimates are conservative, with low estimates for revenue and high for expenses.  He noted that the town's sales tax revenue was about $240,000 last year and is projected at $362,000 this year.  He said that he did not factor in future additional revenues from BJ's Wholesale Club and other new businesses. 

"If we hold onto it for five or ten more years for 'what ifs', residents don't have access to that either," Cree said.  "At the end of the day this is money that doesn't belong to us.  It belongs to the taxpayers."

Another concern was that the board would be perceived as irresponsible because it has collected taxes it didn't need over the past three years.

"Im not saying that," Wilcox said.  "But that is the perception."

"I think you have to remember that this will be the fifth year in a row of a tax rate reduction, and the fourth year of a tax levy reduction," said Town Bookeeper Sharon Bowman.  "I think that we've been responsible." 

Cree brought the 44.15% proposal to Pinney after a careful analysis of the town's finances.  He says that the numbers support that level of a cut with no negative impact to the town projected over the next three years.  he notes that while fund balance monies would lower the tax rate, his plan continues to put new money into he fund balances.

Some board members led by Christopher asked for an emergency meeting last week after Pinney and three other board members came up with the 44.15% number.  Pinney refused in part because residents wouldn't know about the meeting in time, and in part because the board has a full month to change the number.

Pinney says that departments got almost everything they asked for in next year's budget, and even with the 44.15% cut new tax money would end up going into the fund balance.  By the end of 2011 Fund A, one of the two larger fund balances included in the budget, will have risen to $2.324 million from $2.080 at the end of 2010.  Board members agree that the fund balance, to be used for emergencies, should be maintained at about a million dollars.

The rise in the fund balance can be attributed to a number of things that reduced annual expenditures.  While taxes were cut over the past three years, they were not cut nearly to the level that the fund balance was growing.  By the end of last year the fund balace would have risen $429,000 if the town hadn't used about half of that figure to pay off the town's debt.  By the end of 2011 it is estimated that the fund balance will rise an additional $775,000.

Three years ago a sewer project was abandoned that Pinney says cost Lansing around $200,000 per year for four or five years.  That accounted for about 10%.  At that time Lansing's assessment was increased by 18%, and a 15% in the budget was effected that year.  The tax rate was cut by 2% that year, increasing fund balances by hundreds of thousands of dollars.  Two years ago the Town saved about $275,000 (annual) by changing its health care plan for employees.  With some further cuts to departments the tax rate was cut about 4%.  Over the past three years two full time and two part time jobs were cut, one full time position was converted to part time.  All town debt has been paid off except for special district debt.  That amounts to more than $100,000 in principal and interest that no longer has to be paid annually.

"Again, these are projections," Cree said.  "So if in 2013 we decide the budget isn't going to be $4.2 million, it's going to be $5 million and revenues are going to be less than that, you have to go to fund balance or you have to raise taxes.  But at that point you're raising taxes because you've raised the budget."

"It will certainly keep the next board honest," Pinney said.  "They'd have to show why taxes go up."

"I would much rather see us do a smaller decrease over the course of three or four years," Wilcox said.

Board candidate Ed laVigne commended the board for considering even the 33% cut.

"Financially you are very healthy," he said.  "When you argue about how much you are going to cut you should really commend yourselves, because this is where you want to be.  Let's say you did nothing and left it at 0%.  Most people wouldn't argue with that."

Christopher, Wilcox, and Miller said they would be more comfortable with a 33% cut, saying they can look at it again next year and effect a further tax cut if things go as expected.  Pinney and Cree seemed amenable to that.  Cree said he had gone over the numbers several times, and worries that he may be missing something.  He asked town board members to think about the numbers he presented and try to think of anything that would require an adjustment to his proposal for the next meeting.

"That's my biggest concern, that we've missed something," Pinney said.  "We don't want to miss anything.  We're still looking through the budget.  if there's something missing that may change it drastically."

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