After seven hours of meetings with department heads, the Town Board voted 4-1 to adopt a Preliminary Budget that was virtually the same as the supervisor’s Tentative Budget released Oct. 30. I was the "No" vote.
The Preliminary Budget ─ which should be available on the town’s web site ─ will be the subject of a public hearing at 6:30 p.m. on Tuesday, Dec. 2.
Based only on my meeting notes, as board members did not see the actual changes that were made to the Tentative Budget before they voted, changes were made only to the General Fund, resulting in an increase in total expenditures of about $24,000; the increase was offset by a corresponding increase in anticipated revenue from building permits.
Most of the changes discussed and agreed to during the seven hours were small tweaks within each department’s budget, with increases in some budget lines offset by reductions in other lines.
For example, in some department budgets, the board approved new staff salary stipends and salary increases. In the senior nutrition program budget, $20,000 was added to the food purchase line. And I believe the Preliminary Budget deleted the 10% increase in salaries for Town Board members (my suggestion) that was over and above the 3% salary increase for all town employees and elected officials.
The Preliminary Budget is a classic case of “kicking the can down the road.” Remember what happened this year: The board had to adopt a 7.45% tax increase in order to catch up with its unrealistic zero tax increases the previous two years.
Didn’t board members learn that most taxpayers find it easier, and prefer, to absorb small yearly increases rather than one surprise large catch-up increase.
Taxpayers also need to understand what’s missing from Supervisor Ed Lachterman’s repeated assertions about there being a zero town tax increase. The supervisor’s comments very deliberately only include the “town” tax that covers only the General, Highway and Library funds. His zero increase excludes other town taxes that are increasing:
Garbage: Up 2.6%
Water: Up 9.9%
Emergency Medical: Up 4.5%
Hallocks Mill Sewers: Up 21%
Sewer taxes for 10 of the 11 districts that are part of the Peekskill system are going down but the tax for the Osceola district, the largest district, is going up by 7.7%.
Those are the facts on page 4 of the budget. The budget does not reflect the much discussed, but not adopted, plan to consolidate the Peekskill sewer districts and pay for operation and maintenance costs based on water consumption instead of a tax.
It’s simple math. Expenditures are increasing faster than non-tax revenue. For 2026, expenses are increasing by $1.6 million while non-tax revenue is expected to increase by only $577,000. And page 9 of the budget projects the same expense/non-tax revenue gap for 2027 through 2029, resulting in projected tax increases ranging from 5.62% to 7.08%.
The 2026 expenditure/non-tax revenue gap left the board with three options:
Cut expenses, which could result in cutting services.
Increase the tax rate and exceed the tax cap for a second year in a row.
Increase non-tax revenue projections
The board chose the third option. The easiest – but financially risky - option.
While the generally accepted rule of thumb in municipal budgeting cautions that non-tax revenue projections ─ over which the town has no control ─ should be conservative, many of the 2026 projections for non-tax revenue can be considered optimistic, especially given the uncertainty about the 2026 economy. For example, sales tax revenue is projected to increases by 6.42%, mortgage tax by 20% and revenue from building permits by 9%. The budget also increased the drawdown from our fund balance by 5.26%, for a total of $1.5 million.
At the same time, I expressed concern that some expenditure items may have been underestimated in order to keep total expenses down. For example, the electricity line in many departments is the same as it was in 2025 despite the fact that electric rates have been increasing. And at least one department said it would need two new vehicles while the department’s budget didn’t even cover the full cost for one.
Other than the budget cut for Town Board salaries mentioned above, the only other suggested expense cuts came from me and were resoundingly rejected. The ideas I proposed that were rejected include eliminating the $60,000 expense for a public relations firm, and the $69,500 for our outside law firm for non-litigation “extraordinary” expenses over and above its monthly retainer fee that is supposed to cover “advice” without a cap on the number of hours of advice.
As taxpayers, we have to ask ourselves three basic questions:
What services do we expect ─ do we want ─ from our town government?
How much are we willing to pay for those services?
Who should pay for those services? All taxpayers in their yearly tax bill, whether or not they use the service, e.g., police, or as a user fee by those who choose to use the service, e.g., pool passes?
Something to think about. We can’t have it both ways: all the services without tax increases or higher user fees, or a combination of the two. What’s your preference?
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