Sales tax is one of the line items that appears in the each year's town budget and is, for the most part, a 'crap shoot'. One merely has past receipts of sales tax from which to make a reasonable guess as to what might actually occur in the future. Although, along with a calculated guess, it is always wise to use a little common sense.
Sales tax received by the Town of New Hartford in 2005 was $5,181,985. The 2006 budget, adopted by the previous administration in November 2005, showed sales tax revenue anticipated to be $5,150,000 in 2006. Less than previously received, but more than budgeted for 2005. Unfortunately, the sales tax revenue received in 2006 was only $5,000,741.
The 2007 budget was the first budget of the current administration. However, undaunted by the fact that the 2006 actual sales tax revenue was less than anticipated in the 2006 adopted budget, in November of 2006, the current administration adopted a 2007 budget of $5,315,000 anticipated sales tax revenue...$265,000 more than budgeted in the 2006 Adopted Budget. Unfortunately, the actual sales tax revenue received in 2007 was $5,017,463...$300,000 less than budgeted.
Still not ready to be more realistic, the current administration 'upped the ante' and this time budgeted $5,500,000 for anticipated sales tax revenue according to the 2008 adopted budget...almost $500,000 more than the town received in 2007 and more than it could reasonably expect to receive given past sales tax receipts. According to an article in Saturday's Observer Dispatch, we now know that the Town of New Hartford received $550,000 less sales tax revenue than was budgeted for 2008.
This past November, the town board 'threw caution to the wind' and looking into their crystal ball they once again anticipated sales tax revenue of $5,500,000 and thus have included that number in their 2009 Adopted Budget. According to the article in the Observer Dispatch:
Town Councilman Robert Payne III said he would be reviewing the situation with other town council members, and would also keep a close watch on the 2009 numbers.Unfortunately, we won't know the full impact of the 2009 budgeted figures until the first quarter of 2010. All we know right now is that we are $550,000 short for 2008!
“This town has to be very strong and diligent with our finances for 2009,” he said.
Let's look at the budgeted anticipated sales tax in a table:
* budgeted by the previous administration
Now, let's look at the actual sales tax revenue received each year according to each year's adopted budget:
* revenue received during the last administration; total used to develop the 2006 adopted budget. Looking at the single astericked [*] numbers in Table A and Table B , you can see that the previous administration budgeted less in 2006 than they received in 2005.
** The 2008 total for actual sales tax revenue received is approximate using the shortfall listed in the OD and the adopted budget total. The totals for 2003 through 2007 were taken from the adopted budgets each year. We are waiting FOILed documents for the official totals from the County.
Without doing any math, it is easy to see in Table B that each year from 2003 to 2008, the Town of New Hartford has received approximately $5,000,000 in actual sales tax revenue.
Why then would the Reed administration budget for over $500,000 more in the 2008 adopted budget than the town has historically been receiving? Furthermore, given the present climate of the economy, why would they continue to budget a half million more in the 2009 adopted budget than the town has historically received? Didn't they get the "we are in a recession" memo?
And let's not forget that from September 2007 to at least January 2009, the town was paying Frank Basile's CPA firm thousands of dollars to, among other things, assist with the annual budget.
So the questions we should all be asking are: ONE, why would the town board adopt a budget with one half a million more dollars in anticipated sales tax revenue than they could reasonably expect to receive in not only 2008 but also 2009? Question TWO is, how has the town made up the shortfalls in sales tax revenue in previous years of this administration?