Mortgage tax hike cut from budget

A proposed mortgage tax increase was cut out of the 2010 tentative budget for Jefferson County.

The tentative budget was approved at the Finance and Rules Committee meeting on Wednesday afternoon.

The tentative budget now calls for a tax levy of $47,662,838, or 2.76 percent above 2009. It also leads to a tax rate of $6.54, or 16 cents less than in 2009, when measured at average full value.

"We have a nice, responsible budget for the taxpayers of the county that will continue to provide services," Committee Chairman Scott A. Gray, R-Watertown, said during the meeting. "We will work ahead to get ready for the next year."

The board took out the proposed one-quarter percent mortgage recording tax. Right now, a tax of one-half percent goes to the state and one-quarter percent to municipalities in which the mortgage is recorded. The tax was expected to bring in $500,000 in 2010 beginning in July.

Committee members also agreed to put $1.5 million of expected Federal Medicaid Assistance Percentage credit as revenue in the budget. Robert F. Hagemann III, county administrator, said the county is likely to receive $3 million from this credit, which is part of the stimulus package.

"There's a risk here," Mr. Hagemann said. "We don't want to become dependent on additional money."

Along with the additional $1 million allocated from fund balance for the 2010 budget, the credit money represents $2.5 million in artificial savings, he said. That means the 2011 budget will need to either add that amount in revenue or cut it in expenditures because those resources will not be available again.

Using that credit allowed elimination of the mortgage recording tax. Along with a 19th attrition cut, it also meant a lower levy increase of $1,021,378 compared to the proposed budget from county administration.

The changes in the budget have almost no effect on the total spending in the general fund. The tentative budget predicts $176,704,581 in expenses, or 0.72 percent more than in 2009. The public hearing and full board vote on the budget will be at 7 p.m. Tuesday.

The budget remains a stop-gap measure while the legislators and administration seek fundamental changes.

"We just don't know what will be in store for 2011," Mr. Hagemann III said. "We will look at a lot of programs to see where we can make some changes."

Legislature Chairman Kenneth D. Blankenbush said he will recommend creating an ad hoc committee to begin work on programmatic changes in January.

"We want to be in a position where we're proactive," he said. "We don't want to be playing defense if and when we don't receive some support from the state of New York."

During the meeting, James D. St. Croix, D-Watertown, questioned the effect on long-term capital projects.

"I wonder how the infrastructure is going to suffer through this thing," he said.

After the meeting, Mr. Gray, who asked the board in April to consider areas to trim the 2009 budget, once again said the tentative 2010 budget suppressed necessary expenses for another year.

"You can't delay road construction," he said. "There are some changes we can make within the organization to make it more efficient and more cost effective and we need to explore those."