BETHLEHEM The Town of Bethlehem is facing a possible $3.5 million budget gap for the coming year once the Selkirk Cogen energy plant goes back on the tax rolls.
Town Comptroller Mike Cohen and Supervisor John Clarkson presented a town budget projection for 2013 during the Wednesday, May 9, Town Board meeting. Cohen said the loss of the decades-old Payment in Lieu of Taxes (PILOT) agreement, set to expire in December, will cost the town between $1.5 and $1.7 million in revenue for next year.
“The reason is simply we are facing a very difficult budget year,” said Clarkson on why the Town is releasing a budget projection (not a proposal) so early in the year. “We have had some difficult budget years in the recent past, but this (gap) is much larger...”
The loss of the PILOT will result in an estimated 4 percent revenue decline for next year. The town is also expecting 3.4 percent expenditure increase over the current budget.
Members of the budget committee previously said unlike with current PILOT contracts, the Selkirk Cogen contract was negotiated for a 20-year period based on projected future energy costs. Over that time, the Town has been receiving what was essentially the share of the payments meant to go to Albany County and the Ravena-Coeymans-Selkirk Central School District. Those two municipalities will now receive their full shares.
When Selkirk Cogen is placed back on the tax roll, 80 percent of all property taxes will go to the RCS School District while the town, the county and special districts will need to split up the remaining 20 percent.
“I do want to say again that Selkirk Cogen is a model business within the community, they provide energy, they are not the enemy here,” said Clarkson.
Because of the huge loss, the formula used under the state tax cap law would allow the town to potentially raise the tax levy by up to 22.8 percent. If the Board did decide to raise the levy to the maximum allowable limit, taxes would be raised $65 per $100,000 of assessed property value. The town would still be facing a $1.2 million gap even with that tax hike.