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Tuesday, May 21, 2013
Serving the communities of Jefferson, St. Lawrence and Lewis counties, New York
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County to meet with towns on tax issues

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"Jefferson County officials will meet with representatives from its 22 towns to discuss two pressing tax issues — actuarial matters that officials say could have an impact on their budgets and the services they provide.

The first is the county’s sales tax distribution, an issue that came to the forefront in LeRay when the Town Council voted down a tax break for an energy company to turn an idled Fort Drum coal plant into a biomass facility.

Jefferson County gives each of the 22 towns a certain percentage of its income-tax take, a formula that’s based on the assessed taxable property value within its borders. With a tax-break deal, the property is taken off the rolls, reducing the town’s slice of the county-wide sales tax pie. LeRay stood to lose $31,000 annually, officials there said.

The LeRay Town Council eventually agreed with ReEnergy Holdings on the tax break, but it came with assurances that the problem would be addressed. Hence Monday’s meeting. Jefferson County Administrator Robert F. Hagemann III said his employees would be there to answer questions, not make decisions.

“We’re saying to the towns, ‘You’ve really got to work that out,’” Mr. Hagemann said.

The meeting will take place in LeRay.

While they’re there, the officials will also discuss the state’s new property tax cap, and the new fiscal methods that Comptroller Thomas P. DiNapoli is requiring of local governments.

The property tax cap limits increases in the tax levy — or the total amount to be raised by taxes — from one year to the next.

But each county, school board, village, town and city has a different percentage by which it can increase its property tax. The percentage is determined by a complicated formula that takes into account factors like growth in the community, tax breaks given out, pension costs and other spending.

Neither the towns in the county nor the county itself, however, included in their formula a certain type of spending that all parties have a hand in. The county performs tasks for the towns that the towns then pay the county for. For example, the county will provide dog warden service to the towns. In turn, the towns pay the county for the service.

Whose tax levy should that payment count against? Mr. DiNapoli’s office has told Mr. Hagemann that it should show up in the county’s formula, even though the county is not actually spending that money. Last year, the towns weren’t accounting for the spending against their formula, either.

“It needs to show up on someone’s books,” Mr. Hagemann said.

Mr. Hagemann said that he’s tried to get the comptroller’s opinion in writing, but hasn’t been successful so far. He said that the arrangement could lead to less accountability. The county will have to suffer the tax-levy consequences of spending that it doesn’t control — and ultimately is reimbursed for. If the spending counts against the county’s levy, it might not be able to raise its property taxes as it sees fit because it will bump up against a lower allowable increase.

“It cuts our ability to spend our local dollars on our local programs,” he said.

Jefferson County raised the levy by 1.96 percent last year. Officials had thought that they could have raised it by 4.22 percent, but a comptroller’s office official recalculated the figures in January and came up with a new number.

And for a reason Mr. Hagemann cannot explain, it turns out that the county could have raised it even higher with the new spending included. Mr. DiNapoli’s office did not return a call seeking to explain the apparent paradox.

The consequences of the new fiscal arrangement were unclear, but it highlighted just how much local officials have struggled to adapt to the 2011 law.

“It’s more of a frustration,” Mr. Hagemann said.

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