County may become
more active in tax cases
Story by Dan Hust
MONTICELLO September 17, 2013 The county’s continuing struggle to finance its government will become clearer as the tentative 2014 budget deadline approaches and officials are considering a more aggressive approach when tax challenges head to court.
Sales tax stays down
County Treasurer Ira Cohen told legislators at Thursday’s Management and Budget Committee meeting that sales tax collections remain below last year’s.
At this point in 2012, the county had collected just over $20 million in sales taxes, but this year, that’s at $19.4 million nearly $600,000 less.
“Every payment for the past two or three months has been in the negative,” advised Cohen.
The figure does not include August payments, but Cohen indicated declining sales tax revenue is a statewide trend.
“The mortgage tax, on the other hand, has been up and continues to be up,” he noted.
As of August 31, mortgage tax income stands at $485,000, more than $175,000 above this time last year.
A single-digit tax increase?
Later in Thursday’s meeting, Acting County Manager Josh Potosek was prodded to reveal his goal for the 2014 tentative budget, which he must present to legislators by October 21.
“I don’t have firm numbers on where I’ll submit,” he cautioned. “... It will be in the single digits.”
But thanks to a host of growing expenses out of the county’s control (including, ironically enough, from state mandates), legislators may have to approve a budget with a tax increase beyond the two percent state cap.
“Without using fund balance, you’d probably have to exceed the cap,” Potosek acknowledged.
Nevertheless, legislators congratulated themselves on being in a better financial position this year than last, thanks to their frugal stewardship of the 2013 budget.
Though no program or staff cuts are anticipated in the tentative budget, Legislator Cora Edwards did urge her colleagues to focus on “deliverables” (as in what agencies and staff are producing or will produce).
Getting involved in certioraris
During Thursday’s Planning Committee meeting, County Treasurer Ira Cohen asked legislators to consider involving the county more in tax certiorari cases.
Such cases arise when taxpayers challenge their assessments in court, as a variety of individuals and companies (like the Millennium Pipeline) are currently doing on more than $70 million worth of assessed value.
Since assessments are set by town officials, the county often is simply informed of the case while the town litigates it. The county then typically passively accepts whatever the outcome is.
Seeing extra potential revenue, Cohen wants to change that policy.
“We should be involved in the more important ones,” he urged legislators. “... You’re talking about an enormous amount of money.”
But since County Attorney Sam Yasgur doesn’t have the necessary staff to pursue such litigation, legislators will have to consider adding to his office or hiring outside counsel.
But before that hurdle is another, perhaps more difficult one: getting the towns to agree to the county’s involvement. State law, said Cohen, does not automatically give the county the right to intervene, and from time to time, towns and the county have vehemently disagreed on assessment issues.
Further complicating the matter is that towns might view this as a step toward countywide assessing (and they’d be right, said Cohen).
“Can you guarantee there would be a savings?” wondered Legislator Kathy LaBuda.
“I think I can guarantee that,” affirmed Cohen. “... I can tell you: if you’re not in court, if you’re not participating, you are going to have no say in the outcome.”
Yasgur suggested dangling a carrot in front of towns, by offering an intermunicipal agreement whereby the county would pick up 20 percent of the town assessor’s costs.
“We would have standing [then],” Yasgur explained.
Legislators agreed to have Yasgur draw up a resolution for more discussion and to get in touch with assessors, supervisors and school district officials.
“Step one,” acknowledged Legislator Cindy Gieger, “is getting the buy-in from towns to come sit at the table.”
Real Property Tax Services Director Lynda Levine said she’s already preliminarily informed assessors of the idea, which she’s not yet sure is within the county’s legal authority.
Nevertheless, she seemed to support it, as she explained that successful certioraris don’t so much cost the county itself as they do the taxpayers.
“It’s really shifting the burden [of those lost taxes] on to other taxpayers,” she noted, “and I don’t know if they can really afford it.”