Tax Cap Overrides Here To Stay Until Changes Made
It should come as no surprise to city residents that the Jamestown City Council is likely to override the state’s 2% tax cap when it meets for its voting session in May.
The end of American Rescue Plan Act funding removes an outside revenue sources that could have helped to eliminate a tax increase without dipping into the city’s surplus. In February, Gov. Kathy Hochul announced $1.6 million in additional state aid for Jamestown as part of the state budget, but additional aid allocations aren’t always unrestricted aid – and that funding won’t be secured until Hochul and the state Legislature pass a budget that is already nearly four weeks past due.
Ideally, the state money will mean the city won’t have to go far above the 2% tax cap. The extent of the city’s tax increase will hinge on factors somewhat outside the city’s control – the cost of fuel, employee retirement and health care contributions among them. There may be good news between now and October when Mayor Kim Ecklund releases her 2027 budget proposal. And, the city could receive bad news, like the state Legislature ending an Andrew Cuomo-era pension reform that helped bring employee retirement costs down for local governments, for example..
That doesn’t mean the city is in dire straits by any means. Unlike some of the city’s counterparts in the county, Jamestown hasn’t exhausted its surplus. Its tax increases have remained small unlike some north county cities and villages. The city is at 85% of its constitutional tax limit, a far cry from the days when it was at 99% of that state limit. Things could be worse.
But they could also be better.
Tax cap overrides will be a yearly occurrence for Jamestown until its spending status quo changes. The city is likely to need tax increases over the tax cap’s limits as long as the city has its own police and fire departments. Those departments provide services that city residents count on, but they are also the biggest drivers of city spending. Until that structure changes the real question taxpayers should ask each year is how much the city will be over the tax cap, not whether an override vote will be needed.
