Even in a carefully prepared budget, setting the property tax levy and rate is a result of not just spending but also the assumptions made on the various revenue streams.
In the case of the City of Watertown budget the biggest single variable is sales tax...It's also the largest single source of revenue, about doubling property tax revenues.
THE FOLLOWING PARAGRAPH IN BOLD PRINT HAS BEEN CORRECTED DUE TO AN ERROR ON MY PART. I am Deeply Sorry, but don't feel the gist of this posts changes.
Two years ago sales tax (plus a tax settlement on PILOTS) yielded city government $17.8 million but last year the recession and the lack of that one time payoff had pushed the take down by about two million dollars. In the last few months sales tax has been on the rise again due to higher gas prices, a return of consumer confidence as shown in the auto sector and an influx of Canadian shoppers due to a favorable exchange rate.
So the fairly conservative budget projection of $16.1 million for the coming year is likely on the low side. That means even with the proposed spending scenario there may well be no need to generate the $350 thousand in additional property tax revenue.
It really depends on your comfort levels with predictions. Indeed a $400K increase in sales tax expectation would obviate the proposed $4.8% tax levy hike. If you feel the sales tax comes in the same amount short you would need to increase the levy further to keep the budget in balance.
For all the talk of state aid, it is likely the Governor's proposed numbers will hold and hydro revenue should be steady due to new equipment to keep the intake canal clear of debris.
There are other variables like fees and fines, the latter of which can be affected by policy.
There are expense variables. The proposed budget has a bulk amount for contingency, which is primarily pending changes in pay for city workers.
As for the rest of expenditures, the only real changes would be achieved by adding or subtracting persons or programs.
Arguing over the number and price of supplies and equipment is pointless as one needs confidence staff will seek to be as frugal as possible. That has been the case during the recent spending freeze.
The effects of variables on the budget process are rarely discussed by media or politicians who prefer to talk about the tick-tock of reviewing line after line of expenditures, most of which will not be changed as they are well prepared by staff anyway.
The city budget review will get more coverage than the many other local governments simply because the city is easy to cover and of interest to the largest single group of news consumers.
We will see what happens, but I think institutionalizing property tax hikes when other revenues are likely to rise may not be the way to go this year. I guess we will find out next month.