Budgeting with “Discipline”

Tompkins Legislators target 2 per cent tax levy hike for ‘25

by Robert Lynch, May 1, 2024

It’s a time-honored, late-April tradition.  Members of Tompkins County Legislature come as close as the law allows to holding a private meeting.  There’s no video stream.  No one takes minutes.  A plastic waste basket wedged to hold open the otherwise-locked door of the County Health Department Building marked the only step lawmakers took to maintain compliance with New York’s Open Meetings Law.  No other reporters attended Tuesday night’s legislative “Budget Retreat,” though they could have.   It’s not always done, but the County’s Director of Communications issued a five-paragraph news summary the next day.  It covered the meat of the moment, but failed to capture its flavor.  .

A “maintenance of effort” budget will carry a 5.9 per cent higher tax levy; County Administrator Lisa Holmes giving legislators the tough news at the Budget Retreat, April 30.

The Budget Retreat becomes the first opportunity for the County Administrator and budget staff to rough-in estimates and brief lawmakers on the upcoming Tompkins County Budget.  Administrator Lisa Holmes, who’ll retire at year’s end, did the honors Tuesday night. 

And taken in total, her message was somber.  A combination of factors, including omnipresent state mandates and surprisingly stagnant sales tax revenues, could bring a 5.9 per cent rise in next year’s property tax levy just to keep in place the programs that already exist.

But legislators didn’t buy it. “I would be appalled if we went out to our constituents and say we go at or above the (projected) state tax cap of five per cent,” Budget Committee Chair Mike Lane remarked at the meeting.

Note that Albany’s predicted tax cap—the one computed for our county’s government—is 5.06%.  That’s considerably higher than the close to two per cent tax cap often prescribed.  Nonetheless, even this higher cap became a threshold no legislator in the room Tuesday night appeared willing to cross.

Instead, the legislative pushback to Holmes’ budget numbers spoke of frugality.  And it foretold of  a hectic summer ahead for a lame-duck Administrator and her colleagues on the third floor of the Old Jail Building.

Taking a series of straw polls that carry no official standing, legislators at the Retreat targeted a 2025 hike in the Tompkins County property tax levy of an even two per cent.  It would be the same percentage increase by which the County levy rose this current year. 

By maintaining the 2025 levy hike at two per cent, administrators and legislators will need to cut just over $2 Million from the “maintenance of effort” budget Holmes presented to the Legislature Tuesday.  Just where those cuts will be made across County Government’s more than two dozen departments, lawmakers will gladly let Holmes decide from now until budget season in September.

“We can tell ourselves we have to rein ourselves in, but we actually have to do that,” Town of Ithaca legislator Amanda Champion acknowledged.

“We can tell ourselves we have to rein ourselves in, but…” Legislator Amanda Champion

“We’ve gotta’ show some discipline,” Groton Republican Lee Shurtleff counseled his fellow lawmakers.

“We’ve got to cut.” Budget Chair Lane echoed.  “And how we get there is the question.”

Getting to wherever “there” is could prove difficult.  Department heads notoriously stand their ground on money.  And the many agencies that also suck annually on the teats of County Government will want their own usual share too.  An effort near meeting’s end to hold agencies to either a two per cent or one per cent increase in their next year’s awards went nowhere, neither option finding majority support.

“This isn’t a year when you’re going to be able to do much magic,” Shawna Black, last year’s Legislature Chair, acknowledged.  “This is going to be the year when we’re going to make hard decisions.”

“Prioritization” was the most common buzzword at Tuesday’s Retreat.  Black mentioned it.  Former Budget Chair Deborah Dawson said it as well.

“Start with the department heads,” Dawson instructed.  “Prioritize the programs in your department,” Dawson said she would tell each middle-manager.  “This is not a pretty picture.”

Perhaps the perceived privacy of the meeting prompted startling candor.  Even the most sacred of the sacred cows in politically-correct County Government did not graze in peace.   If not sent to the slaughterhouse, at least one or two were given a budgetary kick in the rump by those with questioning minds.

“We have to look at some of the recent initiatives,” Mike Lane said.  He specifically referenced the Reimagining Public Safety initiative, the Ithaca City-Tompkins County collaborative constructed after the 2020 George Floyd killing in response to a long-forgotten Governor Andrew Cuomo dictate.  Reimagining has spawned a cornucopia of race-sensitive policing reforms that employ staff,  redirect priorities and cost plenty of cash.

Reimagining Public Safety, Lane stated “needs to have a hard look.”  That’s all Lane dared say.

The “maintenance of effort” budget that Lisa Holmes brought to the April 30th Retreat would add $3.152 Million to this year’s $53.4 Million County Tax Levy, thereby producing the 5.9 per cent increase.  If adopted—and right now, judging from Tuesday’s discussion, it’s not likely to be adopted—Holmes’ “maintenance” plan would add $155 to the tax bill on a median-priced Tompkins County home.

Mike Lane: “We have to look at… recent initiatives.” And yes, “Reimagining” is among them.

By contrast, a two per cent levy increase would add $100 to the median home’s tax bill.  Keeping the levy unchanged from the current year would add $73.  Although the logic proves hard to follow, the baked-in increase flows from the fact that housing inflation has raised the median Tompkins County home’s price from $249,000 to $300,000 between 2023 and now.

If a two per cent tax levy increase became the ceiling at Tuesday night’s Retreat, it was not the floor.  Some, particularly Dryden’s Greg Mezey, would have cut the levy lower.  And Mezey attempted to do so.

“The base line should be what the levy was last year,” Mezey said.  “I’m not of the mindset where we can keep taxing, and taxing, and taxing, and taxing, and taxing.”

Mezey joined legislators Lee Shurtleff and Ulysses’ Anne Koreman in opposing the two per cent straw poll consensus embraced by 11 others.  Instead, Mezey proposed reversing the current year’s levy increase and cutting the 2025 levy two per cent below what it is now.  Mezey’s attempt failed, yet it secured five votes, including the support of Lansing’s Mike Sigler, now a candidate for State Senate.

Losing six votes to eight was a mid-ground attempt of sorts. It would have kept the 2025 levy the same as this year’s.  Lane gave up before calling a vote on a one per cent increase.

Newfield-Enfield’s Randy Brown insisted that current budget estimates fail to gauge accurately the strength of Tompkins County’s fiscal reserves.  Brown said some money simply doesn’t get counted.  Brown also suggested raising the Hotel Tax by one per cent, though any revenue generated from that source would need to be dedicated to tourism promotion.

Among the many drains on Tompkins County resources is the money-losing airport.  Holmes’ budget would suck $683,000 from the fund balance to bail out the over-built, but now under-utilized airfield.  Brown and others suggested the drain could be plugged in other ways, perhaps through new user fees.

Among the prime cost-drivers to the projected 2025 budget, as Holmes outlined them, were projected employee wage hikes, expected to add $2.3 Million to the budget, or 4.3 per cent added to the levy.  The County’s Capital Program would add $1.38 Million, or 2.58 per cent.  That capital spending would include continuing first steps toward a $40 Million downtown Center of Government.

And state mandates always proliferate.  Some spending, notably in the Department of Social Services, gets locked-in; it remains all that Albany says it must be.  And tucked away within the Health Department’s proposed budget is an added $300,000 to cover mandated psychiatric services, described by Holmes as money to care for criminal defendants unfit to stand trial.

In the past, County Government has relied on mushrooming Sales Tax revenue to prop up its budget.  For the moment, that may not prove possible.  First quarter sales tax receipts this year actually fell more than two per cent from those for the same quarter in 2023.  The Administrator’s budget reflected the new reality.  It dropped projected Sales Tax revenue slightly.

“I wish that the Sales Tax did not seem to be doing what we do not want it to do,” legislator Rich John remarked.  “I’m nervous we may not see the revenue coming in on Sales Tax.”

Rich John’s view of the Sales Tax spilled over to his observation of the “maintenance of effort” budget in general and the sizable tax hike it predicted.

“A six per cent levy increase is very different than what we have done in the past,” John observed.  “I think we need to be a little more pessimistic.”

Rich John: Sales tax is not heading the right way. “We need to be a little more pessimistic.”

One area where Tompkins County Government may save is in an area where administrators might wish they didn’t have to scrimp.  County positions are increasingly going unfilled.  The current employee vacancy rate, Holmes reported, is 12.5 per cent.

“It’s a function of the low unemployment rate and the shortage of workers,” Holmes said.

Holmes’ projected budget assumes a five per cent vacancy rate for the year ahead, up from a two per cent  vacancy forecast for 2024.

Some legislators, like Mezey, saw a silver lining in that vacancy cloud.  With positions open, people aren’t drawing paychecks.  Raising the vacancy projection to reflect current reality, up to maybe 12 per cent, they argued, could shave burdens from the budget.

Lisa Holmes’ “maintenance of effort” budget, even with its 5.9 per cent tax hike, wasn’t even the most expansive (and expensive) option put before legislators Tuesday.  It had its bigger cousin, the “beyond maintenance of effort” alternative.  The “beyond” budget would tack on largely-unspecified additions like supplemental aid for the TCAT transit service, additional support for TC3, and cost-of-living adjustments for nonprofit agencies.  This larger budget would hike the tax levy by as much as 6.24 per cent.  Reading the room Monday, consider this pricier alternative dead on arrival. 

Every vote taken by legislators Tuesday night went officially unrecorded.  It carried no true standing.  Much could change between now and September when real legislative budget crunching begins.  So the two per cent levy benchmark much touted Tuesday could be cast in cream cheese, not stone. 

It was the Budget Retreat’s tone that proved most meaningful.  At least for the moment, at the Tompkins County Legislature, frugality is “in;” extravagance is “out.”

“We’re going to look at trimming down our government,” Shawna Black admitted.  Time will tell if Black’s pronouncement holds true.