The number of cities, counties and villages in New York that are close to reaching their Constitutional Taxing Limit has more than doubled since 2012, according to State Comptroller Thomas P. DiNapoli. The City of Ogdensburg and the Village of Potsdam are on that list.
The Constitutional Taxing Limit is the amount of real property tax a local government can raise in a single year.
According to the Comptroller’s office 20 municipalities in New York have used more than 80 percent of their tax capacity with 10 over 90 percent.
“These 20 local governments are in a challenging financial position with no room for error,” Mr. DiNapoli said in a press release. “The municipalities in danger of exceeding their Constitutional Tax Limit must be vigilant about their short- and long-term budgeting. It is critical they take steps to improve their position.”
Ogdensburg is at 89.6 percent of its limit while Potsdam is at 86.6 percent.
“It’s not new news,” Ogdensburg City Manager Sarah Purdy said. “That doesn’t mean that it doesn’t continue to be a significant concern.”
Ogdensburg had at one point been at more than 90 percent, Ms. Purdy said, but the positive trend is likely fleeting.
“We will hit it. There’s no two ways about it,” Ms. Purdy said. “It’s just a matter of when.”
Potsdam Village Administrator Gregory O. Thompson said the news was nothing to cause alarm, however, it does mean the village needs to start looking at where it can save money or cut back on services.
“If we’re at 86 percent, then we need to start having discussions,” he said. “I think that to reach the remaining 14 percent, it’s not an immanent issue; I don’t think it’s something that we’re gonna reach in the next couple of years, but I think when you get to that 80 percent mark, you start talking about, ‘where are we? How do we get back to where we need to be now?’”
Ms. Purdy noted that the City is already working closely with the State Financial Restructuring Board, and she expects that relationship to continue.
Once a municipality hits its limit, Ms. Purdy said, if all other resources remain stable, governments need to start looking at cutting services and reducing staff.
“That’s what is challenging for us because we’ve already done that,” she said. “There are probably more that we will try to accomplish but once we do that we’re really into deciding, as a city, what are the essential services and what can go.”
Laying off employees is a very last resort and something Mr. Thompson said isn’t something being considered in Potsdam. He did say the village will start looking where services could be trimmed back and what future expenses should be explored, like maybe not purchasing new equipment or stretching out the use of a squad car.
“The bottom line is running a municipality is not getting any cheaper,” he said. “Potsdam has been very fortunate in the past few years. We’ve gone from the most fiscally stressed village in New York state to now we’re literally not even on the radar.
“However, that doesn’t mean that the challenge of taxation doesn’t face us every day,” he said. “So I think what we need to do is maybe tighten up our belt a little bit more. I would rather be proactive. You have to look at every option.”