Lewisboro town house

Lewisboro's finances are left unstable due to impacts from the ongoing pandemic.

Lewisboro Town Supervisor Peter Parsons shared a dreary view of Lewisboro’s finances following several months of a shutdown and growing economic hardship hitting families.

“We look as though we’re squirreling by,” replied Mr. Parsons, when asked to describe the current state of the town’s finances. “Our cash flow is tough,” he said.

Mr. Parsons repeatedly emphasized that the state of the town’s finances is extremely difficult to gauge due to so many unknown factors, including how long the pandemic will last, and how many people will pay local school taxes by the Sept. 30 deadline.

Mr. Parsons stated that the town’s spending and revenue for the first six months of this year compared to the same time last year, were down $685,000 and $419,000, respectively, from the forecasted amounts.

Mr. Parsons said that while this seems sound, $377,000 of the $685,000 decline in spending was in the segregated highways funds, which by law cannot be removed from the Highway budget. As a result, the town’s General Fund, which excludes the Highway Department, is $111,000 in the red compared to a year ago.

“In the second half of 2020, we need to find that $111,000 and fund any shortfall in school tax collections,” Mr. Parsons said.

According to Mr. Parsons, areas most affecting the town’s budget, beyond school taxes, include the mortgage tax, sales tax and individual department revenues.

There is good news for the town in at least one aspect of the budget. In initial projections, Mr. Parsons said the town had estimated mortgage tax receipts to decrease throughout the pandemic. However, Lewisboro has experienced a surge of people looking to buy homes in town, elevating the town’s revenue from mortgage taxes. Mr. Parsons said the town received $290,000 in mortgage taxes for the month of June, which was the second highest mortgage tax receipt for that in the past 10 years or so.

On the other hand, revenue from the town’s portion of the county sales tax has been much more unstable. Mr. Parsons said that the figures were sales tax have been generally down compared to prior years. He described revenue from sales tax in April and May as “badly down,” but added it rose in June for unknown reasons. Mr. Parsons said the unpredictability of some of the budget items make it very hard to make decisions based on current figures.

In addition, Mr. Parsons also noted that revenues in individual town departments are also down. In particular, fees collected by the Lewisboro Parks and Recreation Department were running lower than expected. Even though the department found ways to open the town pool and run a camp in July and August, Mr. Parsons said the town cut back greatly on the numbers registered for both programs, in order to reduce capacity for safety reasons. This cut the department revenue, he explained.

After discussing the recent performance of the town’s budget, Mr. Parsons painted a picture of how the history of Lewisboro’s finances is now coming back to haunt the town’s fiscal stability. Mr. Parsons stated that Tom Herzog, who was supervisor from 1998 to 2003, was criticized for having too large of a town budget reserve and taking too much money from taxpayers without using it. In response to those criticisms, Mr. Herzog and his successors did not raise taxes to build the town reserves, and instead financed operations from available funds, Mr. Parsons said.

Mr. Parsons stated that when he took over as town supervisor, the reserves totaled roughly  $600,000. He estimated reserves would finish this year at around $300,000 to $400,000, a dangerously low level. By comparison, Mr. Parsons said, Bedford’s reserves are likely around $3 million, and that Pound Ridge, which is smaller in population than Lewisboro, also has higher reserve levels than Lewisboro.

In addition, Mr. Parsons noted that reserves in the neighboring towns are being used for “genuine capital costs” to improve their infrastructure, such as a wastewater treatment and disposal project in Pound Ridge, while Lewisboro is using its modest reserves for operating expenses.

Due to the uncertainty of how much revenue the town will receive from school taxes, Mr. Parsons said it is hard to predict where the budget will end up at year’s end. That unknown is concerning, especially because planning and conversations with department heads to prepare next year’s town budget have already begun.

“An odd positive figure like mortgage tax is not enough to make me confident going forward,” Mr. Parsons said, summarizing the uncertain town budget’s uncertain footing.

Jessica Leibman is a staff reporter at The Record-Review where she covers the Town of Lewisboro the Katonah-Lewisboro School District.

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