Ronald W. Nesbitt

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Jun 29

The New York State 2% Tax Cap … and what it means for the Town of Webster

Posted on June 29, 2015 at 9:05 AM by PattiAnn Schultz

There has been a lot of talk recently on extending the tax cap after it expires in 2016. The Governor, along with the two branches of the state government (Senate and Assembly), are leaning towards extending this law past 2016.

A recent poll found that 70% of residents concluded that this is a good idea because it is a good feeling type of law and your taxes will not increase by more than 2%. However, I am here to explain to you that a 2% tax cap is not truly a 2% tax cap and sometime in the future you, the tax payer, will feel the pinch of a law that that is going to cut services to your community.

The facts of the matter are that the 2% tax cap is based on inflation, along with other exemptions, per New York State.  In 2015, this only allowed the Town of Webster a tax cap of 1.56% not 2% as advertised. This 1.56% tax cap resulted in the Town of Webster being able to only have $256,386 more to work with than in 2014.

Now, looking ahead to 2016, our 2016 Town Budget does not yet have its new tax cap number, but it will be right around the same 1.56% as in 2015 or lower – not higher.

The town’s goal for 2016 is to have a budget that stays under the tax cap so residents will receive a small portion of a rebate check from the New York State.  The town, county, and school district all performed under the tax cap in 2015. In doing so New York State will send residents back their own money in October from your 2015 New York State income taxes.  This money is what was over-taxed to NYS residents in April, 2015 when residents sent in their New York State income taxes. Residents, it’s your money they are sending back because New York State itself does not have money – they only have the power to tax and raise fees.

The 2016 tax cap limit has yet to be determined.  So let’s just figure that in 2016 the tax cap amount is around $250,000 for Webster.  In the coming year what will your Town Board do with this is a good question.  First, we already know that health care costs for our employees will be going up 12% in 2016 and that number multiplied by the $2 million annual health care premium means an increase of $240,000.  This will leave $10,000 for other items in the budget before we have to start the cutting process of the budget again this year. That means cutting programs, services, employees, equipment, and just plain letting maintenance repairs slip by the wayside.  The Town of Webster, which belongs to a health care consortium, has absolutely no control over raises in health care costs.

Our recent 2015 Standard and Poors outlook stated, and I quote, “The negative outlook reflects Standard & Poor’s opinion of Webster’s general fund drawdown’s within the past three fiscal years that have reduced budgetary flexibility. We recognize that for 2014, Webster performed better than expected, but that it continued to use reserves. While we understand the drawdowns are partially attributable to unexpected expenditures, their continuance could lead to our lowering your rating by one notch.”

In simple terms this says that since the tax cap has been put in place, the town has had to take money from reserves to balance the budget because we can’t raise enough revenues to properly fund the services that the residents of Webster want AND still provide each of you with a check in October. In the long run from today, in my opinion, the tax cap will do more harm than good to services within the Town of Webster.

If you don’t believe me, please stop one of the four Town Board members (Bill, Patti, Barry or Randy) and ask them their opinion of the facts. Or you could contact any of the other fourteen town department heads who help make up the 2016 budget and ask them what this tax cap is doing to the services in their department that they provide to you the Webster resident. 

As an example, this just crossed my desk today from Highway Superintendent Joe Herbst: the leaf machines that two years ago cost $19,000 per machine have gone up to $38,000 per machine in just two years.  This is because of new EPA requirements imposed recently for emission controls and the cost of steel in making the equipment.  So costs are going up plus no revenues to cover higher costs equals fewer services.

I am not placing blame or whining to my constituents … I am just giving the facts as we have them and what we are facing in the Webster community as we move forward to create the 2016 budget.

If you have any questions about your town government, please feel free to contact me during regular business hours at (585) 872-7068; or email me anytime at  

Ronald W. Nesbitt