BALLSTON SPA -- Saratoga County's proposed 2012 budget would hike the sales tax in the county from 7 percent to 8 percent and use more than four-fifths of the county's savings to help pay for $320.7 million in spending.
If approved, it would mark the first increase of the county's sales tax since it was instituted in 1982, and Saratoga County would lose the distinction of being one of only five counties in New York with a sales tax rate of 7 percent. Among the others are Warren and Washington counties.
Officials say the $11 million in county revenue expected from the sales tax increase - as well as the use of $10.4 million in reserve funds - is necessary to balance the budget and keep property taxes at $2.16 per $1,000 of assessed property value for a fifth-straight year, one of the lowest rates in the state.
"I'm never happy to have to raise taxes, but in this situation, it's the best alternative to us," said Saratoga Supervisor Tom Wood, who chairs the Board of Supervisors. "It beats raising property taxes."
The proposed budget includes no layoffs or new positions and maintains a hiring freeze implemented earlier this year. It is almost 9 percent higher than the adopted 2011 budget and would collect a little more than $49 million in taxes, an increase of about $90,000 over 2011.
It anticipates $261.3 million in other revenues, leaving a gap of about $10.4 million to be filled using reserve funds - a "huge dent" in the county's savings, Wood said.
"There's very little fund balance remaining at the end of the year," he said.
Due to unbudgeted expenses this year, County Administrator Spencer Hellwig estimated the reserve fund will stand at just $2.1 million once the 2012 budget is balanced.
The state comptroller's office recommends the county maintain a balance of at least $12 million, he wrote in a budget address included with the proposed budget, which he filed Wednesday.
Wood said a sales tax increase would build up the reserve fund over time. It would also help the county's towns and cities, which receive 50 percent of the sales tax revenue collected in the county, he said.
Raising the sales tax would require passing a local law, which would need to be sent to the state for approval.
Supervisors will consider the budget and may amend it in the coming weeks. A public hearing on an amended budget is scheduled for 5:30 p.m. Dec. 1, and the Board of Supervisors expects to adopt a budget on Dec. 14.
Malta Supervisor Paul Sausville said the sales tax increase is an unfortunate option but one that must be on the table as the budget is discussed.
"Somehow or another, we have to plug the hole," he said.
In his budget message, Hellwig said supervisors need to find a way to narrow the budget gap at Maplewood Manor, the county-run nursing home. The county will have subsidized the home's budget to the tune of more than $40 million over eight years by the end of 2012, he said.
He said the proposed budget trims $16.5 million from the funding requested by the county's 32 departments. Payroll costs are down more than 2.5 percent, or $1.2 million, over the current budget year through attrition, Hellwig said.
Hellwig said the county could have increased the tax levy by nearly $1 million and fallen below the state-imposed 2 percent tax cap.
His message expressed little optimism about the future of the county's finances.
"Our experiences this year have made it clear that we no longer have the resources, and forces beyond our control will no longer allow us, to continue operating under the old business model," Hellwig wrote.