The Port Jervis City Council on Nov. 27 adopted a property tax levy of $7.6 million for 2024, which is 4.16 percent, or $305,552, more than that of the current year.
The total budget stands at $17.4 million, which is about $1 million more than 2023’s.
The tax levy hike almost doubled the maximum amount the state tax cap allowed.
Mayor Kelly Decker told The Epoch Times that the hike was necessary to fund basic city functions amid financial challenges such as inflation and rising employee benefit costs.
“There are no frills to it, and it keeps the city operational,” he said of the approved budget. “You have to pay for employee retirements, you have to pay for health insurance, and you have to make sure that your fire and police departments are functional.”
Retirement contributions for city employees, including police officers, are budgeted at $1.3 million for 2024, an increase of $185,000 from the current year.
Retiree health insurance is budgeted to be about $196,000 higher than in 2023.
To make matters worse, Port Jervis saw a $95,033 drop in taxable assessed property value for 2024.
That decrease was driven by a loss in the taxable assessed value of houses at about $173,000, which was partly offset by an increase in the taxable value of commercial properties.
“Although, in principle, I hate to override the tax cap, but in all practicality, we have to; there is no other way around it,” Councilman Timothy Simmons said before voting in favor of the hike.
Two-thirds of city council votes are required to override the state property tax cap.
“My fear is always that, as a body, we may not take seriously how much we can impact the taxpayer if we don’t do our due diligence to get the budget down to as low as possible, but I think we have worked hard at doing it,” Mr. Simmons said.
‘Do Not Touch the Fund Balance’
Some local governments found a way to get around an above-cap tax hike despite challenging conditions, according to Mr. Decker, and that was to tap into fund balances.A fund balance is essentially an account in which unspent revenue accumulates at year-end.
Mr. Decker likes to refer to it as a savings account, which he said he must guard carefully so that the city can pay its bills when unexpected emergencies hit.
During the past 10 years as mayor, he has steadily built up the unassigned fund balance—money with no strings attached—in the city’s main operational fund from $779,000 when he first got into office to nearly $3 million at the end of last year, according to audited city financial statements.
Even in lean years, Mr. Decker refused to dip into that account to offset the property tax hike.
The city has elected to override the state tax cap almost every year during his tenure.
The current fund balance accounts for about 15 percent of the city’s annual operational expenses, a healthy level that Mr. Decker said he wanted to keep intact and pass on to the next administration.
“What I am asking as a parting gift,” Mr. Decker said to city council members when he presented his budget on Nov. 13, “Please do not touch the fund balance.”
Mr. Decker didn’t seek reelection and will leave the mayoral post in December.
Elected Official Pay Raise Taken Out
As another parting request, Mr. Decker asked for a pay raise for elected officials, including the mayor and city council members, but it was taken out by the council.Mr. Decker’s original budget called for the mayor’s salary to go up from $30,000 to $40,000 a year and the city council’s salary to increase from $47,500 to $56,500.
“It is a public service, but you also need to be compensated for the work that you do as the CEO of a $20 million business,” he told The Epoch Times.
“I am not saying that the mayor should be a full-time position; I am not saying that it should be paid $100,000; what I am saying is that for a busy part-time position, you need to be compensated at least decently for it.”
When Mr. Decker first got into office, the mayoral salary was $20,000 a year, which he raised to $30,000 several years ago, and his end goal was $50,000.
“I’ll leave it in the hands of the next mayor to take the reins, and I’ll support him 100 percent,” he said.
In total, the city council managed to cut the mayor’s budget by $17,000.
City councilman-at-large Stanley Siegel cast the lone “no” vote to both the tax cap override and the budget.
“Many people in our ward live day to day; they don’t eat properly, and they don’t get clothed properly,” he said. “When I vote, I vote for them, not for me, and that’s the reason I voted ‘no.’”
The city also passed a $2.5 million water budget and $2.1 million sewer budget on Nov. 27.
