The Only Thing We Have to Fear About the Tax Cap is Fear of the Tax Cap Itself. Maybe.

This is the last article I’m going to write about the tax cap for a while I think. Much has been written about how it may affect our schools, but not about how it will affect our town. This is the last article for a while about the matter, I promise.

If you have been following the issue, Albany has voted to limit property tax increases to 2% or the rate of inflation, whichever is lower. Some say this will help small businesses in suburban areas and assist residents who may be suffering from ballooning property taxes. Opponents say that the cap deprives local municipalities of the power to decide how they raise and spend their money. Those against the cap contend that it will not help businesses and residents, but just lead to cuts in services and education.

According to one recent study, if the 2% cap is in place, due to the costs of pensions and healthcare mandates, Westchester County is already $11 million over the property tax increase. In the current Scarsdale Village 2011-2012 budget, expenditures went up just over 6% mainly due to health insurance and pension costs, debt servicing and an increase in assessment appeals.

Local governments like Scarsdale will now have to rely heavily on revenues from sales tax, mortgage taxes and investment income. With the state of the economy as it is there is little reason to believe those receipts will be strong any time soon.

Scarsdale residents can vote to override the tax cap on the school budget with a 60% supermajority. However, for the village budget, monies for police, fire, maintenance and town services are voted on by the Board of Trustees. A supermajority of the board- meaning 4 votes out of 7- would be needed to override the tax cap as well.

If that override doesn’t happen, the town may have to cut jobs, including those of police? Fees could rise, services will go down. But, your property tax will only go up 2%. Big win, right?

Alfred Gatta, the Scarsdale Village manager, has heard all of these concerns, probably more than anyone else in this town:

"If we have to stay within the 2% cap on the tax levy we'd likely have to reduce services and reduce some employees." He notes that a supermajority of the board can vote for an override. But Gatta says fears over the tax cap are probably hurting not helping matters.

"I want to avoid the anxiety that is out there. Everyone is worried and wants to form committees and studies to analyze what to do if the tax cap override doesn't pass. Although I understand that is a fear for every police officer and resident in this time, we do not have the time or money to research everything and have it explored. Let's take a deep breath and see how things come out.”

And Gatta is right. Going on about these matters may be divisive. Individually, one can take issue with each budget line item in the school or Village budget --- from playgrounds to the Mandarin teacher to employee salaries. One by one we can make a case that an item is inessential or too expensive, but taken as a whole, these things add to the overall quality of our community and make Scarsdale what it is.

When it’s time to vote on this issue, think broadly and think long term. That’s it. That’s all I’m going to write about it. Probably.

Jen Geller is a freelance journalist who has covered the economy and markets for over a decade at a major financial news outlet. She lives in Scarsdale with her husband and 2 children. Jen has yet to bake a successful batch of cookies.