Dissolving the village of Highland Falls could cut its property owners' taxes by as much as 29% but raise rates or have little tax benefit in the rest of the town of Highlands, according to a study released before a Nov. 8 citizen vote on the proposed dissolution.© KELLY MARSH/TIMES HERALD-RECORD FILE PHOTO Main Street in Highland Falls.
The analysis was done by Laberge Group, a consultant the village hired in July after residents petitioned to force a referendum on the fate of the 115-year-old municipality. Village voters will decide in two weeks whether to eliminate the Highland Falls governing board and workforce and get all municipal services instead from the town of Highlands.
Read the report: Highland Falls consultant issues report on dissolving village
Referendum set: Board hires consultant, schedules vote on dissolution petition
Petition filed: Residents seek vote on dissolving village of Highland Falls
The 62-page report is meant to help village residents weigh the pros and cons of the proposal in terms of taxes, governance and potential changes in services. Only village voters will cast ballots on Nov. 8, not those in the rest of the town.
A key factor in determining the potential tax impact was an annual payment that the state offers local governments as an incentive to consolidate. Towns that get that funding – known as the Citizen Empowerment Tax Credit – after a merger or dissolution must use at least 70 percent of it each year to reduce taxes.
That would mean $960,375 per year for the town of Highlands, the Laberge Group calculated. Using that full amount to lower taxes would cut the combined town and village taxes that Highland Falls property owners now pay by an estimated 29.2% – a $1,068 annual savings for a $250,000 home, according to the report.
Taxes for property owners in the rest of the town drop by 0.6% under that scenario.
If the town instead used the 70% minimum of its annual subsidy from Albany for tax savings, taxes for village property owners would drop by 25.7%, or $938 a year for a home with a $250,000 market value. Property taxes in the rest of the town would rise by 4.9%.
The consultant also considered the potential impact if Highland were to get no annual subsidy if the state stopped funding that incentive. Taxes still would drop by 17.4% for property owners in the former village, but jump by 17.7% in the rest of the town.
Part of the anticipated savings for village residents would come from eliminating three full-time and five part-time emergency dispatchers that the village employs. That was based on the understanding that the Orange County 911 system would then answer all calls for police, fire and ambulance service throughout the town.
Other savings were based on the expectation that the town police force would continue to staff only part-time officers after adding the dissolved village to its coverage area. The village currently has its own police department with a chief, two sergeants and five officers who work full time, along with nine part-timers.
The Nov. 8 referendum will ask voters one short question: whether the village should be dissolved. If approved, the village board must draft a plan in about six months to dismantle the government and dispose of its property and other assets. The Highlands Town Board ultimately would decide what services the former village receives, including police coverage.
If voters reject the proposal, it can't be revived by another petition for at least four years.
The tax estimates in the report apply only to those charged by the town and village. Dissolving the village wouldn't affect county and school taxes.
As a caveat to the projected tax savings for village property owners, the consultants noted that 48% of Highland Falls homes are occupied by tenants, who would benefit only if landlords pass along the savings by reducing rent.
Laberge Group estimated the formal steps of dissolving the village and switching to town services could cost as much as $275,000. That expense could be defrayed by one or two $50,000 state grants and part of the annual state subsidy.
This article originally appeared on Times Herald-Record: Report finds that dissolving Highland Falls would slash taxes for village property owners
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