Bad news for Greenburgh taxpayers (but a silver lining for Edgemont's feasibility)
This week, Town of Greenburgh Supervisor Paul Feiner presented his tentative 2018 budget. For the unincorporated area, the tax rate will increase by 2.8%, which exceeds his tax increases of 2.6% and 2.5% in 2017 and 2016, respectively. In the nearly two years that the EIC has been researching incorporation, all of unincorporated Greenburgh has endured an 8% increase in the tax rate.
For the Edgemont area of unincorporated, that 8% jump is separate from the reassessment-driven increase in tax share that hit Edgemont in June. For 2018, we are slated to pay 26.6% of unincorporated Town taxes, up from 23.7% in 2016. The combination of the tax rate and share increases means that Edgemont’s tax contribution to the unincorporated “B” budget is up nearly 18% over the period from 2016-2018.
What do these numbers mean for Edgemont’s incorporation?
Let’s consider an alternate universe in which Mr. Feiner had approved our petition, the referendum was held in 2017, we voted to incorporate, and tax revenues began to flow to the new village in 2018.
The EIC financial feasibility study, released in January 2017, was deliberately conservative in its revenue estimates. At that time, we didn’t know with precision the two key inputs driving our 2018 Village property revenue tax projection: 1) the final reassessment figures (which were released in June 2017); or 2) the Town tax rate for 2018 (released this week).
So, to be conservative, we assumed 1) no increase in the Town tax rate; and 2) that Edgemont’s share of the Town’s assessed valuation would go from 23.9% to 26.0%. With those assumptions, the EIC village tax revenue estimate was $14.6 million.
As it turns out, the Town tax rate didn’t increase by 0.0%, but went up by the aforementioned 2.8%. And reassessment came in higher (worse) for Edgemont than we expected. With the benefit of fresh data, the Village will be entitled to $15.3 million of property tax revenues, an increase of $700,000 above the projections in the study.
This week, we also revisited other revenue assumptions and concluded that the Village of Edgemont is also likely to exceed certain non-property tax projections. Specifically, we only budgeted $200,000 for building permit revenues, a figure likely to come in higher (note: Irvington, Dobbs, and Rye Brook all comfortably exceed $500,000) given the value of construction that occurs in Edgemont. Similarly, mortgage tax revenues are tied to valuations, and we undertook our projections of that source before the reassessment.
With an additional $300,000+ of other revenue on top of the more favorable property taxes, the Village will have $1 million more revenue than we projected last January—that’s 6% higher.
What are the key take-aways here?
- $1 million of additional cushion affords us extra certainty that Edgemont will be financially viable through the transition period and beyond;
- Higher revenue also means more flexibility on services (e.g. enhanced contracting power);
- The Village will have the opportunity to either make capital investments in the community with less debt, or pay down debt at a faster pace; and
- A larger budget surplus increases the likelihood that the Village won’t have to increase taxes as the Town has, year after year.
Stay tuned for additional updates to the feasibility assumptions.
P.S. Please note the following letter which appeared in the Scarsdale Inquirer today which notes both Westchester County Executive candidates' views on shared services with villages, including a Village of Edgemont.
Don't forget to vote on Tuesday.