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Most Potsdam village homeowners would save $339-$1,019 each year if village dissolved

Posted 10/2/11

By BILL SHUMWAY POTSDAM – Most village homeowners would save $339 to $1,017 in property taxes each year, depending on the value of their home, if the village is dissolved and a town police force …

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Most Potsdam village homeowners would save $339-$1,019 each year if village dissolved

Posted

By BILL SHUMWAY

POTSDAM – Most village homeowners would save $339 to $1,017 in property taxes each year, depending on the value of their home, if the village is dissolved and a town police force were created.

By contrast, most town taxpayers living outside the villages would see a $208 to $624 tax increase. Village of Norwood property owners would pay $168 to $504 more annually if Norwood failed to dissolved its police force after a town-wide department was created.

That’s according to calculations based on the “Potsdam Options Report” produced by the village Dissolution Study Committee this summer. And it also assumes New York State will make good on a Citizen Empowerment Tax Credit (CETC) designed to encourage government consolidation.

Even if the village were dissolved, village property owners would still be responsible for paying $415,000 in retiree benefits for former employees and $120,000 for village street lighting each year, or $3.10 per $1,000.

Nonetheless, village taxpayers will see their total village-town-county tax bill drop from $26.40 per $1,000 to $19.62 per $1,000 if the CETC credit is received. That translates into a rate decreate of $6.78 per $1,000, or annual tax savings of $339 for a house valued at $50,000, $678 for a $100,000 home and $1,017 for a house assessed at $150,000.

The CETC credit is equal to 15 percent of the combined property tax levy when local governments consolidate. However, there is some concern, given the state’s precarious financial situation, that the credit may not continue in future years.

Some taxpayers outside the Village of Potsdam have been expecting their “town” tax bill would go up much more than it actually will if voters approve village dissolution on Nov. 8. That’s because what is commonly referred to as the “town” tax bill due each January also includes the county tax bill, which is more than twice as high as the town’s.

Even though town taxes would more than double, the total town-county tax bill for those living outside the villages would actually increase by about 33 percent. School taxes would not change.

Town residents living outside the village now pay $2.25 per $1,000 assessed value in town taxes and another $1.58 for fire coverage, charge backs and highway department taxes, for a total of $3.83 per $1,000 valuation. By contrast, county taxes are $8.53 per $1,000, and that number is not going to change if the village is dissolved.

The town board would ultimately decide which village services to continue, and at what level, if the village is dissolved.

But using the recommendations put forth by some members of the Dissolution Study Committee’s Police Subcommitte, which calls for establishing a town-wide police force, perhaps with two or three additional officers and another cruiser, town taxes would jump to $9.20 per $1,000 valuation.

Adding in county taxes and subtracting $1.21 for the CETC credit, total town-county taxes end up at about $16.52 per $1,000. That’s a $4.16 per $1,000 increase compared to the current $12.36 town residents living outside the villages now pay for town and county taxes.

Residents who now live in the village would pay $19.62 per $1,000 if the village were dissolved, which includes the $3.10 for former village retiree benefits and street lighting, the $17.72 combined town-county tax bill and the $1.21 CITEC credit.

For a town-outside-village house valued at $50,000, that means a total estimated tax increase of $208; the increase would be $416 for a $100,000 home and $624 for a $150,000 building. The estimates do not include exemptions.

Continuation of a police department would be the biggest factor affecting town tax rates if the village were dissolved. One option, not recommended by the Dissolution Study Committee, would be to not have any town police force, relying instead on existing service provided by state police and the St. Lawrence County Sheriff’s Department. If the town board chose that option, all tax rates would be significantly lower.

Yet another option cited by the Dissolution Study Committee would be to create a special police district within what is now the Village of Potsdam. However, the committee warns it is “technically feasible but politically unrealistic” because both the village and town would have to ask their state legislators to propose and support such a district, as state approval is required. The committee report notes legislators believe “the governor would veto the proposed law.” In any case, creation of such a police district would result in costs to current village residents that might also be higher than present village taxes.

The Village of Norwood, which operates a small police department, might be expected to abandon its own police service if the Village of Potsdam is dissolved and a town police force were created. That’s because the town is required to provide police coverage to all areas of the town – or no police coverage at all – and the Norwood police department might be viewed as redundant. If that were to happen, Norwood residents could expect their property taxes to drop, not increase.

If the Norwood police department were discontinued, among the options the town board could consider if it decided to create a town police force would be a slightly larger force to include staffing now available in Norwood, but with one chief and administration and a sub-station in Norwood. That scenario would allow the town-wide department to shift officers between the downtown Potsdam headquarters and the Village of Norwood depending on demand.