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Fulton Lawmakers Will Waive Tax Cap Limit Before Passing New Budget

Fulton city lawmakers are poised tonight to vote to ignore the state’s limit on tax levy increases, even though the budget they will approve is well below the limit.

The Common Council holds a public hearing and vote on the 2012 budget beginning at 7:00 p.m. Tuesday.

The proposed budget will raise the city’s tax levy by 1.17%, the first increase in at least three years.  That’s well below the 2% increase limit imposed by the state in Governor Cuomo’s tax cap plan.

Local governments can ignore the cap if they take a separate vote on waiving the tax cap and it passes with at least 60% support.  On the six member Common Council, that will mean at least four members have to vote to waive the cap.

But if the tax levy increase is well below the cap, why waive the cap?

Mayor Ron Woodward explained that because the tax cap law is brand new, there’s not a lot known about how to comply with it.  He said there are penalties for raising taxes above the 2% cap without waiving the cap, so the state association for local governments is urging them to waive the cap this year.

“If something happens and we didn’t report that tax levy (properly), we get punished,” he said.

If local governments know little about how the cap will be implemented, they know that the public knows even less about the cap.

For instance, the 2% cap is not a limit on tax increases.  It’s a limit on the increase in the tax levy.  Fulton is losing $8 million in taxable property value in 2012 because of the closing of Birds-Eye, Cayuga Community College’s move to the former P&C store and the forced revaluation of the hydroelectric stations in the city.  Even no increase in the tax levy would force residents to pay more in taxes because the remaining taxpayers pick up a small share of the lost taxes on the revalued properties.

And the 2% cap isn’t really 2%.  A number of items are excluded from the cap.  Fulton could have increased its tax levy by a little more than 3% this year and still have fallen below the “2% cap”.  Because it is under the cap this year, next year’s cap will be as much as a percentage point higher.

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2 thoughts on “Fulton Lawmakers Will Waive Tax Cap Limit Before Passing New Budget

  1. Good try Mayor, that explanation is not going to work, you’re paving the way for the big hit on us taxpayers, because you and your coharts don’t have the courage to make the necessary cuts to stop kicking the can down the road until you finish your last term in office. CC members do the right thing and vote no, you know what he is doing the your constituents!

  2. MR. TERRY HAVE YOU LOOK AT THE BUDGET THE MAYOR AND SIX MEMBERS OF THE THE COMMON COUNCIL DID EVERYTHING IN THERE POWER TO HAVE A ZERO PERCENT TAX LEVY. IF YOU ARE AS SMART AS YOU SAY ALMOST EVERY LOCAL GOVERNMENT IN THE STATE HAS WAIVE THE 2 PERCENT CAP. THE MAYOR HAS ELIMATE WHOLE DEPARMENTS AND CUT THE BUDGET TO THE BONE MR TERRY I ASK YOU TO LOOK AT THE BUDGET. CITY EMPLOYEES ARE DOING THEIR SHARE TO TAKING A PAY FREEXE FOR TWO YEARS AND PAYING MORE FOR THEIR MEDICAL INSURANCE

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