Plan to break tax cap scrapped in Somerset

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November 3 – BARKER – Somerset City Council will hold a public hearing on the city’s draft budget for 2023 at 6 p.m. on November 9 at City Hall. The council previously passed legislation to exceed the 2023 tax cap and increase the tax levy by more than 2%, but has since decided to dip into reserve funds to mitigate the impact on municipal ratepayers.

Supervisor Jeff Dewart has projected the reserve drawdown at $70,000, which he says is enough to keep the tax rate “steady”. The city’s unallocated reserve fund is currently “just a bit above what the state wants us to be,” he added.

If the budget is approved, the general tax rate for 2023 will be $2 per $1,000 of assessed property value, an increase of 2 cents from the current rate.

Using reserve funds isn’t the only thing that keeps the budget balanced, however, Dewart said.

Termination funds to “fill the gap” in tax revenue since the dismantling of the Somerset power station have been approved by the state and are expected to arrive early next year, he said.

About $240,000 was included on the revenue side of the 2023 budget in anticipation of those funds — 80% of $300,000 — after the city included $158,000 of termination funds in 2022 and did not receive the silver.

“We were able to cover it,” Dewart said. “But only because department heads have limited spending.”

Dewart said he was confident the termination funds would be paid out in 2023.

The revenue stream is actually a grant fund attached to the Power Generation Facility Shutdown Mitigation Program for municipalities that qualify by demonstrating a loss of revenue due to the shutdown of a power plant. The Somerset Generating Station made regular payments in lieu of taxes to the city, Barker School District and Niagara County during its operation.

The city’s overall planned spending is up in 2023 due to inflation, Dewart said; gasoline, fuel, diesel and electricity prices are all higher.

Municipal funding for youth baseball and softball leagues will not be cut, but the city’s highway department budget has been cut by $59,000. The department wants to build a new storage shed and it has been decided to apply for grants for this, Dewart said. In addition, the proposed purchase of a new power charger will be postponed for some time.

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