Tax boo-boo triples rate

Chatham error means town will see 14.1% hike, not 4.8%

CHATHAM- The town of Chatham is raising property tax rates a whopping 14.1% in 2013 – thanks to the combination of deferred expenses and a major accounting error made by town officials when calculating the property tax base. The budget adopted last month showed an increase of 4.8%.

In a letter to the editor issued Monday, December 24 and published in this edition of the paper announcing the accounting mistake, Town Supervisor Jesse DeGroodt said he and the Town Board are troubled at unexpectedly finding they adopted a budget with a 14.1% tax increase. “Be assured that, had we realized this, we would not have passed a budget at that level of an increase,” Mr. DeGroodt wrote.

The board thought its $3.6-million budget would result in the 4.8% property tax rate increase for town residents shown in the resolution adopting the measure earlier this year. Before approving the increase, the board was required to adopt a resolution to override the 2% state property tax cap, which members in November.

The error came to light when the 2013 tax bills arrived in the town clerk’s office last week, Mr. DeGroodt wrote in his letter. He said the mistake occurred because when calculating the town’s tax base, the assessed value of the Village of Chatham was included in the formula by mistake. “This resulted in a larger assessed valuation to be divided into the tax levy, which skewed the proposed tax rates to a lower number than it actually should have been,” wrote Mr. DeGroodt.

Mr. DeGroodt, who also serves as the town budget officer, attributes the error to “a misunderstanding” between himself and the town assessor. He said town officials discovered the error when the printed tax bills were delivered to Town Hall.

Board member Bob Balcom, a Democrat, was one of two council members to vote against the annual spending plan, calling it “unsustainable” even with an increase of 4.8%. The other No vote on the budget was Maria Lull (R).

Mr. Balcom said that board members depend completely on the town board and the assessor for the figures used to assemble the town budget. He agreed that the erroneous tax rate calculation for 2013 was probably a mistake caused by a “miscommunication” between the supervisor and the new town assessor, Daniel Horst. And he suggested the problem may have resulted from the changeover in assessment procedure last year, when the town dropped it old system of having three elected assessors and switched instead to a single appointed assessor. An attempt to reach Mr. Horst this week by phone was unsuccessful.

The property tax rate increase means next year town residents will pay $3.44 for every $1,000 of assessed property value, said Mr. DeGroodt. That is 43 cents more per thousand than the townwide rate in 2012. A homeowner with a house assessed at $100,000 would pay $43 more in town property taxes next year.

In an email to the Columbia Paper, Mr. DeGroodt said the mistake did not affect Columbia County’s portion of the property tax bill.

The budget error also changes the Village of Chatham’s property tax rate, although Village property owners will still see a slight reduction in their tax rates. Village property owners’ tax rate will drop by 1.2%, instead of the projected decrease of 9.45%, wrote Mr. DeGroodt.

According to board discussions in budget workshop meetings in October, the main reason for the town’s increased expenses in 2013 is the long-overdue purchase of highway equipment. Highway Superintendent Joe Rickert said at the time that the town had deferred replacing highway equipment during the recent recession, but those purchases could be delayed no longer.

In his letter, Mr. DeGroodt said the board has no way of reversing what happened in the 2013 budget process, but “we understand what we need to do going forward.”

He said the Town Board will approach the 2014 budget process with the tightest possible controls on taxation and budgetary planning. “We will not go forward pretending that we have ‘found’ money with this error,” he wrote.

Mr. Balcom said the budget that was adopted didn’t make sense to him from the outset because he did not see any budget cuts. Although he understands the miscalculation was a human error, he said this week, “I am going to need a much better explanation.”

(Parry Teasdale contributed to this story.)


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