By Timothy Chipp
As summer comes to an end, all ears and eyes on the Town of Niagara Town Board are shifting from smiles to financial figures.
And Town of Niagara Supervisor Lee Wallace’s fiscal outlook for the 2023 budget isn’t exactly rosy.
Wallace said he’s submitting the preliminary budget to Town Clerk Sylvia Virtuoso’s office next week, signaling a tricky time for the town’s elected leaders. They’ll have to contend with a New York state tax cap hampering financial growth, and figure out exactly what an estimated sales tax revenue might look like in a year that’s seen extreme inflation run amok and hamper consumer spending.
“We’ve had two (payments in lieu of taxes) end,” Wallace said during Wednesday’s work session, a preview of the financial struggle the town is going to face in the coming months. “That counts directly against the tax cap, which is really handcuffing us.”
Niagara remains a rarity in New York local politics, charging no townwide property tax to fund the general fund of its budget, roughly $5 million in spending. Wallace and others are debating ending this practice as they balance residential needs with the soaring costs of town functions.
Wallace said he’s learned the town’s credit rating remains set at AA, short of the best available rating of AAA, slightly affecting the rates bonding agencies would be willing to lend the town. That, along with other factors like increased interest rates in general as the economy remains out of balance following the brunt of the COVID-19 pandemic and Russia’s war in Ukraine, may hurt revenues this year, as well.
What About Past Financials?
While Wallace provided a tease of the budget coming soon, Luke Malecki, partner at the town’s auditing firm, Drescher & Malecki LLP, spoke to town leadership about the year that ended in December.
Malecki helped provide a look at the town’s financial past, spanning over the past five fiscal years.
The past year’s financials looked odd, he said, compared to 2020’s, due to the COVID-19 pandemic and its effects on local governments. Departments like Parks and Recreation, Malecki said, saw a big spike in expenses year-over-year because those departments were mostly closed in 2020.
Being open for business for much of 2021 meant the costs of doing business were greater. But a comparison to 2019 spending shows the town’s expenses are more in line with what’s expected, Malecki said.
Drescher & Malecki LLP are set to provide the town with a clean, unmodified opinion, which is the best opinion available from an independent auditor. It will likely be formally submitted in October, Malecki said, as the firm is still waiting for a few pieces of information unavailable until later this month.
But that information won’t change the outcome, Malecki said.
Beyond increasing expenses, Malecki said a few things to note from the audit are:
√ Sales tax revenues jumped significantly as consumers in 2021, possibly fueled by the final stimulus package of the pandemic approved by Congress in March 2021, pumped about $250,000 additional revenue into the town. This happened despite the Canadian border being closed to most travelers for much of the year.
√ The town received another boost of roughly $100,000 extra in mortgage tax income from property sales in 2021. Combined with the sales tax, the town received more than $350,000 extra revenue that wasn’t forecasted when the budget was developed.
√ Federal monies also made their way to the Town of Niagara bank accounts, with roughly $350,000 split between the general find and the Highway Department, which used the money to purchase a pair of new trucks, Malecki said.
The Town Board will hold its regular meeting at 6:30 p.m. Tuesday, Sept. 20, at Town Hall, 7105 Lockport Road. Among discussion items will be a presentation recognizing the 100th business anniversary of Cooper Sign, which Councilman Marc Carpenter will recognize for longevity.