County law change may lower municipalities’ tax caps
JOHNSTOWN – Fulton County is considering changing its Workers Compensation Self-Insurance Plan law, the net effect of which may be to lower the state tax-levy cap calculations for the county’s municipalities.
However, county Administrative Officer Jon Stead said Monday the county government may have “more room” by increasing its tax cap calculation due to the move.
The move is being made because the state comptroller feels Worker’s Compensation Plan coverage is a cost to each municipality and should be in the tax cap calculation for each municipality, not just the county, officials said.
Stead said the state comptroller’s office is coming up with “new interpretations” on how to compute the tax cap for municipalities and that’s where the Worker’s Compensation plan comes into play as a chargeback.
According to the state comptroller’s website, counties often provide services which they chargeback to municipalities. They can bill municipalities for those services.
The state takes chargebacks into consideration when calculating a municipality’s tax cap, and that can reduce or raise the cap.
County Budget Director Alice Kuntzsch on Thursday told the Board of Supervisors’ Finance Committee there’s a current “disparity” with Workers Compensation insurance.
“This Workers Comp insurance we put on the county’s side of the house is really part of the levy part of the [municipalities] because it’s part of their bill,” Kuntzsch said.
The Finance Committee supported a proposed resolution for Monday’s Board of Supervisors’ meeting setting a public hearing for the board’s Aug. 12 meeting to amend a county law from 1956. That law administered the Fulton County Workers Compensation Self-Insurance Plan and the amendment revises the payment method for participants.
According to the 1956 county law, the cities’ and towns’ annual Workers’ Compensation payments are apportioned along with county taxes.
But Kuntzsch informed the Finance Committee a recent “tax cap compliance review” by the state comptroller found the worker’s compensation costs of cities, towns and villages were not included under the county’s tax-cap calculations.
Kuntzsch said the comptroller feels Worker’s Compensation Plan coverage is a cost to each municipality and should be in the tax cap calculation for each municipality.
She said the state comptroller is recommending Fulton County follow the approach of other counties and change the procedure for collection by billing the annual chargeback to the municipality in January each year, as prescribed by law. Kuntzsch said each municipality would budget for the annual expense within its own budget. She said the change would be effective for the 2014 Worker’s Compensation apportionment.
Stead said because of this “new interpretation” with the insurance, “that expense is now a town or city expense, not a county expense.” He said it should count against the lower municipalities’ tax-cap margin. The net effect could be a lowering of the caps for the county’s municipalities, he said, but it could provide “more room” for the county.
This is the third year the state has imposed its 2 percent tax-levy cap on its municipalities.
Stead said the New York State Association of Counties is estimating many of the municipal tax caps statewide will end up being “well below” 2 percent for 2014.
The county’s levy limit for 2014 hasn’t been set yet by the state comptroller’s office.
Michael Anich covers Johnstown and Fulton County news. He can be reached at email@example.com.