Income from mortgage taxes is down all over Erie County, but the blow to the Tonawandas has been mostly offset by conservative budget figures for 2009.
Each year Erie County sends two rounds of mortgage tax revenue to local municipalities, the first in June and the last in December. This year the first round weighs in $1.65 million less than last year, a county-wide loss of 22 percent. Erie County Comptroller Mark Poloncarz said that lowered amount could negatively impact nearly every city, town and village and further complicate existing budget shortfalls.
“The reduction in the mortgage tax distribution reflects the weakened state of the economy and fewer or less-expensive property transfers occurring in Erie County,” Poloncarz said.
In the City of Tonawanda, the drop was just more than 18 percent. But City Treasurer Joe Hogenkamp said the city budgeted for such a decline, cutting anticipated income from $180,000 in 2008 to $130,000 in 2009. Even in the middle of last year when budget deliberations began, the writing was on the wall.
“We kind of anticipated that in our budget this year,” Hogenkamp said. “We knew this was coming, and we put in a 28 percent reduction. So I think while we may not be right on, we’ll be pretty close.”
The Town of Tonawanda, which will see a 4.3 percent decrease, cut its estimate by nearly 10 percent over last year. Town Comptroller Ed Mongold said the payments have been going down for the past three years, which could seem counterintuitive since mortgage rates have been dropping over that same period. But just because rates keep going down doesn’t mean people are going to keep searching out better deals year after year.
“Rates are going down, but most of the people who would be refinancing have already done it,” Mongold said.
Once combined with a drop-off in home sales, that trend spells less income for all of Erie County’s municipalities. But neither the city or town has taken a blow like Cheektowaga, which lost nearly 47 percent, or Buffalo, which ended down more than 32 percent.
In the meantime, Hogenkamp said he’s hopeful the revenue will pick up, but isn’t particularly optimistic or pessimistic in any direction.
“With the rates down, people could start refinancing more, but houses also aren’t selling right now,” Hogenkamp said. “So I would rather keep anticipating less and ending up with more than the other way around.”
Contact reporter Daniel Pyeat 693-1000, ext. 158.
Local News
June 16, 2009
ERIE COUNTY: Municipalities seeing a dip in revenue as home sales slow
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