Letter to the Editor from Bob Harrison

To The Editor:

We are concerned about the 3.70 % proposed Village Tax increase for the fiscal year beginning on June first .

The School Board proposed tax increase for its fiscal year is only 2.43 %. We strongly feel any village tax increase should be in the 2.0+ % area.

Our concern is that the proposed Village budget should be as accurate as possible . Since the tentative Village budget was filed on March 18th, the Federal Reserve Board has publicly made significant changes in the outlook for interest rate policy to fight inflation. They now see seven interest rate hikes this year and five rate hikes next year and these rate hikes can be 25 to 50 basis points each. That means the Village interest income based on a 1.75 federal funds rate on $40 million that the Village has in local banks will be $700,000 more of income and if the FED raises rates 50 basis points five times that would add $ 500,000 more of interest income .

Each $ 400,000 of interest income can reduce the tax rate increase by " One Percent. " So our taxpayers could have the proposed 3.70 % tax increase reduced to a 1.95 % Village tax increase and could be reduced further by 1.25 % if the FED raised rates by 50 basis points.

To be fair because of increased inflation for Village costs there would be increased expenses for the Village. However, about 70+% of Village costs are already set by labor contracts and material contracts like paving can be timed when prices are lower.

We feel there is no reason for a 3.70 % Village Tax increase base on the added interest income that will be raised by investing Village funds in US Treasury bills at rates of 1% to 2% versus the banks based on interest rates in line with the new Federal Funds rates.

Send your support for a lower Village tax rate to our Mayor and Village Trustees with an email to [email protected] and to [email protected].

Bob Harrison, Chairman
Scarsdale Taxpayer Alert
Cell phone: 914 646-4054
65 Fox Meadow Road
Scarsdale, NY