FONDA - Montgomery County Treasurer Shawn Bowerman warned the county Legislature on Tuesday that it needs to avoid budget problems in the future.
Bowerman said there's nothing wrong with the current budget, but he is concerned future county budgets will continue to increase while the county's revenue may level off or even decrease.
Bowerman briefly got the new legislature up to speed regarding the budget at the monthly Finance Committee meeting, with an eye toward putting them on a path to making sound budget decisions in the future, he said.
"We're just looking forward and we have to avoid making [the] mistakes that the Board of Supervisors made," Bowerman said.
In December, the Board of Supervisors adopted a $101.2 million budget at its last meeting ever. This was a $3.4 million increase compared to the 2013 budget.
Bowerman said one of those mistakes the Board of Supervisors made was the appropriation of an additional $1.5 million from the county's fund balance in December. Bowerman had appropriated $2.3 million in the preliminary budget, but the supervisors added the additional $1.5 million against the advice of the county's auditing firm.
"We have to fix the budget [for years to come] because this is the first year that our total budget has topped the $100 million mark," Bowerman said. "We're not set up to have that many figures in the budget [over time]."
The 2014 budget calls for a 3.5 percent tax-levy decrease. Bowerman said the county's tax levy has been a steady number or even decreased in the last seven years.
However, he said the county has limited sources of revenue.
"The main sources of revenue that the county has consist of sales tax, state aid, federal aid and property tax," he said.
Bowerman said the tax levy represents about $26.5 million of the budget, sales tax represents about $27.5 million and state and federal aid represent about $18 million.
The problem with the tax levy leveling out or decreasing is that the county's appropriations have stayed the same or increased, Bowerman said.
"Appropriations haven't stopped increasing, but the tax levy has," he said. "We're making up that increase through other sources, and we've been fortunate that sales tax has grown over the last couple of years."
Bowerman attributed the sales tax increase to the growth of businesses on Route 30 in Amsterdam and the sale of fuel and diesel throughout the county.
However, Bowerman said the county's fourth quarter sales tax revenue for 2013 decreased. Bowerman said he's afraid the revenue is starting to level out.
Bowerman said he thinks the higher appropriations and lower tax levy is causing a dangerous "yo-yo effect" for the county, with its tax rates going up and down.
"My view on taxes is to try to hold a line and keep taxes steady instead of giving these people a yo-yo effect of up and down, up and down tax rates," he said.