The residents of the Village of Spencer have a critical decision to make on Sept. 15. Do they want to continue to support the local village government or dissolve it?
In January, a non-resident of the village, Cris Pasto, presented a petition to the Spencer Village Board asking for a referendum to dissolve the village. Information flyers circulated by Pasto and other petition-carriers state that property owners will receive significant tax relief by dissolving, eliminate inefficiencies of duplicate layers of government, and services will not change for residents.
This has been true for many villages that have dissolved, but according to a recent study this will not be the case in Spencer if dissolution is approved.
“Spencer’s situation is unique,” Ben Syden said, representing Laberge Group, which conducted the interim study on how taxes and services would be affected if the village dissolves. Syden presented a report to village residents on Aug. 24 in the Spencer municipal building and answered questions after his presentation. He noted that there are two key questions for each voter to consider: does village dissolution make “sense” logically, and will it make “cents” for village residents by lowering taxes for them?
Laberge takes no position on the dissolution question but does provide information so that voters are informed before they vote.
Syden repeated his statement: “This is unique—where the village tax rate goes up.”
Typically, dissolving a village does result in tax savings for residents, but not this time, according to Laberge’s financial analysis. At best, if New York State is able to keep its incentive promises, village taxpayers would see a property tax reduction of 2.6 percent while town taxpayers would see a reduction of 22.3 percent.
A key unknown factor in this process is whether the state will have the money to pay out the promised efficiency incentive, called a Citizen Empowerment Tax Credit (CETC). The governor regularly says that the state is running a deficit in the billions already due to COVID-19 costs and lost revenues. In normal fiscal times, the state will appropriate promised CETC funds in each year’s state budget. By law, the incentive is supposed to be paid annually in perpetuity.
The incentive amount is set at 15 percent of combined pre-dissolution village and town taxes. Of this amount, 70 percent must go to residents for property tax relief, but which residents?
If the town should get the CETC funds, it is the town board who decides how to allocate them. According to a chart on page 13 in the dissolution study (available via a link on the village website, villageofspencer.com), if the CETC funds do not come at all, the projected impact is: former village residents will see a property tax increase of 12.5 percent; town-outside-village residents get a tax reduction of 8.6 percent.
Assuming application of 70 percent of CETC (the minimum required by the law): former village residents still see an increase in property taxes of 1.9 percent; town-outside-village residents will get a tax reduction of 18.3 percent.
If 100 percent of the CETC is applied, then former village residents will get a property tax reduction of 2.6 percent; town-outside-village residents will get a reduction of 22.3 percent. Syden reminded those present in person and by Zoom that there is no guarantee that New York State can or will appropriate those funds, as it also must balance its budget, by law.
Syden shared another caution based on the current fiscal crisis in New York. The state spurs more efficient government initiatives by also promising municipalities grant money to do the dissolution studies.
However, in the current fiscal crisis, the village has not yet been able to even apply for the grant money promised for the dissolution study and is on the hook for $25,000, Laberge’s fee, paid upfront, for the dissolution study. For eight months the village has not been able to apply because the state has not made the application available on its website. No one at the meeting knew when or if it will appear.
In addition to the tax numbers, there are other implications for dissolving the village. The town board is on record as being unwilling to continue funding a local police department. For village residents who think that the sheriff and state police provide adequate and prompt responses, this is good news. Other members of the village community do support having a local police department and want to keep it.
Fire protection is a huge unknown question. The town must contract with some fire service to provide fire protection, by law. How that will work out is very unclear, as there are several possible options. Proponents of dissolution look forward to eliminating the municipal building and its attendant costs to maintain, but it houses the fire department and the Spencer Library. Where these two organizations would go, if the municipal building were sold, is unknown.
As for other village services, street lights are considered a benefit for the village residents, so their taxes will continue to pay for them in a special lighting district assessment. Refuse collection would also be a village-only assessment.
Nichols Park and Pond are a big concern to many. Is the town willing to maintain them at the current level? Decisions like that will rest only with the town board, if dissolution takes place. The town board has said that it will continue Panther Pak, the summer recreation program.
On Sept. 15, village voters will decide what they want to do. If they vote to dissolve, then there must be a plan for dissolution created to address all the details of dissolving the village.
Syden stressed, “There is no automatic second vote. That is false information—a myth.”
If some residents want to force a second vote, they must bring a petition to the village board, and there will be a second referendum. Otherwise, dissolution simply proceeds.
Syden also reiterated the information that whatever is written in the dissolution plan is not binding on the town board. The town board does not have to follow any of it. An audience member pointed out that even if the current town board were to follow it, the next election could change that, since it is not binding in any way.
The polls are open from 12 to 9 p.m. on Sept. 15. Absentee ballots may still be available.
Contact the village clerk at Clerk@villageofspencer.com or (607) 589-4310. You can also download and print an Absentee Ballot Application and mail to the Village Clerk at PO Box 346, Spencer, NY 14883 or drop off at the Office located at 41 Main Street, Spencer, NY.