PEEKSKILL, NY -- City Manager Rick Finn's just-released proposed 2012 budget calls for a tax levy increase of 3.4 percent in order to compensate for state pension and insurance costs.
The city's recommended property tax levy for 2012 will be $14,094,276, which represents an increase of $462,579 over the property tax levy for 2011.
This represents a 3.4 percent increase in the property tax levy with one percent of those funds, $134,967, being placed into special revenue account to be used exclusively to repay the anticipated debit service for the construction of the new central fire station. The remaining 2.4 percent, or $327,592, will be used to fund 2012 expenditures.
According to the budget, which was posted in its entirety on the city's website, www.cityofpeekskill.com, the average city residential property owner with a home valued between $270,000 and $320,000 would pay between $75 and $94 more per year in property taxes.
While the 3.4 percent increase is higher than the two percent tax passed in Albany this year, the new state law allows exceptions for certain leave pension increases which allow the city to increase taxes an additional 1.4 percent to compensate for the significant pension cost increases the city will pay next year.
City pension costs for police and fire employees will increase by 4.2 percent while the pension increases for the blue collar, white collar and management staff will increase 2.8 percent, according to Finn.
"When we look at all the dollar amounts that are increasing pensions next year will increase from this year to next year with no salary increases considered is increasing by $514,090, a very significant increase coming off of a large increase last year," Finn said.
Medical health insurance benefits will also increase by approximately 15 percent, and the pension and insurance increases together total a $1,250,452 spending increase for the city.
Along with a debt increase account of $1.8 million and an estimated revenue of $547,513 the city started budget planning this year with a $1.3 million shortfall.
Finn's proposed budget does not include any funds for wage salary increases but does provide funds to pay for a police arbitration decision which is anticipated by the end of the year. The budget also includes the use of $1.5 million in fund balance.
A public hearing will be held on the proposed budget at Monday's Common Council hearing, and the council will vote on the budget in December.
Click here to sign up for Daily Voice's free daily emails and news alerts.