Allegany County over/underbudgeting helps maintain second highest property tax rate in state

NEWS ANALYSIS: Allegany County lawmakers appear to be racking up increasing surpluses, which aren’t being returned proportionally to taxpayers, helping to maintain its distinction as the second highest property and third highest general sales taxed county in the state.

Allegany Hope Community News found the increasing pattern following an analysis of four years of budget documents, brought on by county decisions to deny various financial records which would provide greater detail in regard to its bulging and escalating county surplus.

Financial data denied
As reported last night, County Board of Legislators Chairman W. Brooke Harris of Alfred denied a formal Community News appeal of a Freedom of Information Law (FOIL) request, saying that “Allegany County has no records responsive to your request (for five years of surplus accounts information). Allegany County is required by law to provide its financial reports and all accompanying documentation to New York State on an annual, not monthly, basis.”

The FOIL, however, provides, by definition, that a ” ‘Record’ means any information kept, held, filed, produced or reproduced by, with or for an agency or the state legislature, in any physical form whatsoever including, but not limited to, reports, statements, examinations, memoranda, opinions, folders, files, books, manuals, pamphlets, forms, papers, designs, drawings, maps, photos, letters, microfilms, computer tapes or discs, rules, regulations or codes,” and not just formal reports.

This leaves the county’s claim that it maintains no ongoing accounting records highly dubious.

Original FOIL requests for this data, along with three additional sets, were ignored, resulting in the Appeals.

Underbudgeted revenues add to surplus
Our search through four years of budget documents, as shown on the chart accompanying this story, shows that county revenues are consistently adding to the the county’s surplus, which already had been in the same range as an entire year’s county tax levy, meaning that the county has been taxing for some time at twice the rate of taxing requirements.

We used numbers from the most recent budget each year to create the chart due to several totals not matching from year-to-year.

In 2021, according to budget presentations, the county received over $6.9 million in revenue-over-expenses but only used $2.75 million in 2022, reducing the tax rate by 28-cents per $1,000 of true valuation. Residents of many towns, however, actually experienced a property tax increase last year due to equalization rates.

Nearly $11 million revenue surge
In 2022, the county saw a nearly $11 million surge in excess revenues but only used $3,000 of it to reduce the current year’s property tax levy, resulting in a 45-cents per $1,000 true value tax decrease, again with many towns experiencing a property tax hike due to equalization rates.

Use of just $10 million of the additional surplus, instead of $3 million, would have reduced property taxes by more than one-third of the $29.45 million total county levy last year.

As noted, the county already had been carrying surpluses of some $30 million which, in general, equaled a full year’s property tax levy, which it already could have used for significant property tax relief.

Legislators push back
Chairman Harris and several other lawmakers have pushed back against the idea of a major tax decrease, alleging that if property taxes are reduced next year by $10 million, they would have to go up again the following year.

Financial calculations, however, demonstrate that this only would occur if the county failed to stay within its budget when, in recent years, it actually has been receiving higher revenues than expenditures, creating additional excesses as a result of itst budgeting practices. For the past five years, the opposite of Harris’ claims have been occurring and intensifying.

A simple example of the misinformation would be if the county or an individual had $30 million in the bank and reduced the amount to $20 million by making a gift or providing tax relief, it still would have $20 million in the bank each year going forward as long as it maintained a practice of living within its income.

County already indicating more surplus
In the current year, tentative county budget data already shows Allegany receiving over $4.65 million more than it has expended as of a date that was not readily apparent in the budget document. Based on the budget proposal being presented on November 1 and having to have been printed, it is assumed that the numbers were as of September 30, leaving three months of potential change.

County sales tax, as we previously have reported, is continuing to surge over 2022, with the State Comptroller reporting that the county has received $25.55 million in sales tax receipts through the end of October, just over the $25.5 million which the county budgeted as estimated revenue for this entire year.

Based on prior year’s receipts for the primary holidays purchasing period, the county can expect to receive over $6 million more through the end of the year. It currently has budgeted $29 million for next year, or an additional $4.5 million above 2023.

Allegany Hope Community News’ FOIL request for fund balances by month were expected to confirm that the county never needed more than a couple months of surplus to help finance any cash flow needs throughout the year, creating a “reasonable” surplus under the law, with excesses being returned to taxpayers in the form of lower property or sales taxes.

Even back in 2021, County Treasurer Terri Ross told legislators that that there was some $11 million available, after allowances for cash flow, for legislators to “play with,” which could have included potential for significant tax relief.

Lawmakers, instead, have continued to bank the excesses.

County legislators could vote on next year’s budget at its meeting Wednesday, although no agenda has been received as of this writing.