Budget and Bed Tax

Well, the impossible has been achieved: the Budget Committee has prepared a balanced budget to present to the Full Board at the end of the week. After that, any adjustment need to be made by the full board.

It took a long time to close the $9 million+ gap. The $2 million+ tower project cost for next year was covered by loans, which will add almost $1 million in interest to be paid off during subsequent years. The reduction in projected DSS revenues was offset, to a great extent, by updated revenue projections in other areas of DSS function. There has actually been a lot of activity in this area since the original budget was prepared in August, and much of that activity results in good fiscal news for Otsego County.

Lots of projects won't get done next year; the technical term for this is “kicking the can down the road.” Department heads cut and shaved and did without. And a number of vacant positions – and some that were not vacant – were cut from the budget. But not as many as some folks wanted. Rick Hulse fought for the elimination of 25 positions County-wide, much more than was needed, because he felt that this was the way to longer-term stability. Don Lindberg wanted to cut more, for reasons that were not as clear. In the end, enough positions were cut – including two in the Sheriff’s road patrol – to get to zero, and no more.

Also cut was the bed tax distribution, which has been a lightning rod of controversy and perhaps the single most disputed issue on the Board this year. Until now, the 4% tax added on to tourist accommodations has all gone to the County, ostensibly to support and grow tourism, but, as we all know, money is fungible. Originally proposed by Oneonta then-mayor Dick Miller, Cooperstown mayor Jeff Katz, and Board member Ed Lentz, the distribution returns some of the bed tax that is collected to the municipalities, pro-rated based on the proportion of the total bed tax which comes from each municipalities.

The original proposal did not pass, but later in the year – in what can only be a bold political move – three Republicans, including some who had voted against it, re-introduced, with great media fanfare, a “new” bed tax proposal with extremely tiny and insignificant differences. It passed, and so a Democratic initiative became Republican. Two of the three Representatives who re-introduced the plan did not get reelected, so it is not clear whether this was a good move. At any rate, the will of the Board was, and is, that part of the bed tax should be distributed to the municipalities from which it emanates.

But that distribution was eliminated to balance the budget, so municipalities will have to wait until next year. Unless this whole process was developed to kill a plan and still take credit for it...