Peekskill Budget Plan $120,000 Over Tax Cap

An additional $120,000 must be shaved from the Peekskill acting city manager's $35.6 million budget proposal for it to fall under the state's property tax cap, officials announced during Monday’s common council workshop.

Although state law mandates that municipalities and school districts must cap their tax levy increase at 2 percent, the city has exemptions that allow it to increase the tax levy by a little more than 5 percent.

The 2013 spending plan submitted by Brian Havranek, the acting city manager, would increase the tax levy by $837,972, or about 6 percent, to $14,804,248. Charles Emberger, the city comptroller, said the tax levy needs to be closer to 5.1 to 5.2 percent in order to come in under the cap.

“To stay under the cap, we need [a tax levy] $14,678,000,” Emberger said.

Havranek's proposal would cut 31 full-time employees, or 14 percent of the workforce, for a savings of about $2.9 million. Of those 31 positions, seven are currently vacant. Another 9 part-time positions would be cut, for a savings of about $164,349. 

Emberger said the city has one exception of $213,000 because it did not use the maximum increase it allowed under the tax cap in this year’s budget. The city also has another exception of $255,000 for state retirement payments.

Overall, the city has about $570,000 in total exceptions.

The council will pass a resolution during next Tuesday’s board meeting authorizing it to hold a public hearing on a tax cap override on Nov. 26, which is the same night the  council plans to present its adjustments to Havranek’s budget. The council needs a supermajority in order to override the tax cap.

Emberger said the council can choose to hold the public hearing anytime before the Dec. 1 deadline the council has to approve a budget.

Foster wondered if it made sense for the council to schedule a public hearing, since it has already committed to staying within the cap and people may get confused by the process.

Councilwoman Marybeth McGowan said it wouldn’t hurt to have a public hearing on the tax cap, but she agreed that the council needed to stay within the state's mandated property tax increase.