MOUNT VERNON, N.Y. Scott Oling, a Partner with OConnor Davies, said Tuesday that the City of Mount Vernon doesnt have money budgeted for tax refunds for property owners who are challenging their taxes.
Oling said the main reason for this is the tough economic times that cities across America have been experiencing since 2007. He said that as things went south and budgets had to be tighter, the money set aside for refunds was essentially used to balance the citys budget.
If you dont budget for refunds you have to find money from other lines in the budget like the police department, Oling said. Wherever the money is taken from to cover refund payments you may have to bond and pay interest.
Still, Oling said that in 2011, the city collected $1.8 million more in property taxes ($49.7 million) than it had budgeted for. He said property taxes in the city reflect the extent to which taxes are collected. If people or companies dont pay their taxes, which Oling said happens, the city still needs to come up with the money to operate.
Unfortunately the money would have to come from somewhere to make up for those people who dont pay their taxes, Oling said. The city did overlay about $1.2 million, which can be used as a cushion, but the property tax money still needs to be collected. Its a good process to have given you know some companies arent paying their taxes, but unfortunately it would be a 3 percent hit on the tax rate just for that.
Oling said the city took $3 million in undesignated funds from the fund balance to balance the 2012 city budget and took an additional $5 million from undesignated funds to balance the 2011 city budget. Still, Oling said the undesignated fund balance has been replenished by $4.8 million going into the 2013 budget season.
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