By Marina Kiriakou and Kathy Savolt -
In this article, we explore the intricacies of the Village budget, shedding light on the allocation of taxes, diverse revenue sources, the impact of capital projects, and the management of debt. As the Village undergoes the budget process for fiscal year 2024-25, we will present more information and detail on how your tax dollars are spent and other important issues.
Village Budget Overview: This year’s operations budget totals $44.9 million. See HERE. Drafted by the Village Manager and approved by the Board of Trustees (BOT), this financial blueprint serves as a guide for the village, detailing planned expenditures and revenue sources. It provides a holistic view of how taxpayer dollars and other revenues will be distributed to meet community needs and support essential services and projects. Despite annual increases in both revenues and expenses, Village taxes have stayed below the tax cap, with no significant recent increases and the occasional decrease. Additionally, the unrestricted fund balance, important for emergencies, has actually grown as necessary to remain an appropriate percentage of the overall budget.
Fiscal Year: The fiscal year is June 1st – May 31st. New York State law requires the budget be adopted by April 30th.
Tax Distribution: Of the total taxes collected from homeowners, village taxes make up 25% of your tax bill, while approximately 60% is allocated to schools and the remainder to Westchester County and the Town in which you reside.
Top Expense: The largest percentage of the budget - 80% - is designated for personnel (salaries and benefits), highlighting the government's service-oriented nature. This underscores the difficulty of finding ways to cut the budget.
Sources of Revenue: The Village relies on a mix of revenue sources, including property taxes, sales tax, and departmental income. Property taxes are the largest source of revenue – 64% in last fiscal year. They had been as high as 70% in past years but with the State tax cap, and the increase in sales tax revenue due to sales tax collection on internet sales, the Village has been able to increase non-property tax revenue.
Sales tax and mortgage recording tax contribute an additional 12%, while departmental income, derived from sources like parking meters and lots, contribute to the revenue stream. Ongoing efforts to increase departmental income involve raising fines and fees and exploring new revenue sources. It is important to note that certain revenues, such as parking and park fees, were impacted by external threats like COVID-19, beyond the Village’s control. Other new departmental initiatives have been controversial (monetizing Florence Park) or not successful (boat storage at Harbor Island) leaving gaps in revenue.
Emergency Relief Funds: Last year, Federal emergency relief funds helped the Village balance the budget. The final result would have been in a deficit if we hadn’t received $1.6 million from FEMA. See HERE - document page 21. An additional $181 thousand has been received so far this year.
Impact of Assessed Rates: Your taxes are influenced by two factors: village expenditures and the assessed rate of a property. Disproportionate changes in a property's valuation (assessed rate) compared to others in the community can result in a larger share of taxes for that property owner. Annual assessments by the Towns of Rye and Mamaroneck play a crucial role, with changes potentially affecting taxes. Generally, property value affects the tax amount, placing a larger burden on higher-valued properties.
Capital Projects and Debt: Total debt for capital projects has grown, with a 103% increase from 2019 to 2023. See HERE. Additionally, the village has borrowed over $4.8 million for various improvements in the current fiscal year, including major park enhancements, a new Harbor Patrol boat, vehicles for parking enforcement officers, and patrol cars for the police department. The impact of these projects is expected to elevate debt service in the budget, but projections were not provided when the BOT approved the projects. Debt repayment schedules (for both interest and principal) vary based on project lifespans; major capital projects can be financed over 30 years. Debt has been actively managed by the Clerk-Treasurer who refinances when interest rates are favorable. However, both rising interest rates and increased borrowing are expected to impact next year’s budget.
Role of the Budget Committee and Auditors: Comprised of seven volunteer community members, the budget committee can play a vital role in advising the BOT on financial matters and prioritizing capital projects. Their input helps ensure alignment with the village's goals and needs.
An annual audit, conducted by an outside accounting firm, verifies financial accuracy, with auditors affirming that the current fund balance is an appropriate percentage of the budget available for emergencies.
Continuous improvement in the budgeting process, addressing debt management strategies, and setting clear priorities with an understanding of their fiscal impacts will enable the Village of Mamaroneck to effectively allocate resources and meet its priorities.
At the February 26th BOT meeting, a schedule for reviewing and finalizing the 2024-25 budget was set. See HERE.
