Sales Tax Eliminated For Clothes & Shoes Under $110 In Dutchess County - Plus - Forfeited Beacon Sales Tax Renegotiated Without Disclosing Beacon's Collection To Public

Starting March 1st, 2022 residents and visitors shopping in Dutchess County will not pay sales tax on individual clothing or footwear items costing less than $110. This cut in sales tax was first announced in October 2021, and adopted when Dutchess County passed its budget in December 2021. Sales tax generated from Beacon continues to be forfeited to Dutchess County - meaning the City of Beacon does not collect the money generated from sales tax to spend at its digression.

For decades, the decision for Beacon, Poughkeepsie and other municipalities in Dutchess County has been to funnel sales tax money to Dutchess County, and receive negotiated payments from Dutchess County in return. The dollar amount of sales tax generated from Beacon has not been disclosed by Dutchess County or New York State, as reported by A Little Beacon Blog, and continues to not be disclosed during Beacon’s recent negotiations with Mayor Lee Kyriacou in 2022 and signed legislation to continue the practice.

But First - The Benefit For Shoppers

According to Dutchess County’s press release from Dutchess County Executive Marcus Molinaro sent 2/28/2022: “The sales tax exemption on clothing and footwear was adopted as part of the 2022 County Budget which provided for and is part of several efforts to deliver sustained tax relief to Dutchess County residents with more than $20 million in annual tax relief, including the largest property tax decrease in County history.”

“Starting Tuesday, residents and visitors will now pay less when they need to make essential clothing and footwear purchases. Combined, we are delivering $20 million in sustained tax relief.”

This means that every item in a store that is clothing or footwear and is under $110 will not be charged sales tax. Shops that ring their sales up manually will need to remember to do this when writing out the receipt. Shops that use point of sale (POS) systems and bookkeeping software like QuickBooks will have an easier time of assigning what products within their inventory have sales tax attached.

Different Sales Taxes Attached To Each Purchase In New York State

There are different taxes attached to retail sales. “In New York State, clothing, footwear, and items used to make or repair exempt clothing which are sold for less than $110 per item or pair are currently exempt from the State’s 4% sales tax,” according to Dutchess County’s press release.

“Consumers currently pay the Dutchess County sales tax rate of 3.75% and the 3/8th% Metropolitan Commuter Transportation District (MTA) tax, for a total of 4.125% tax on these purchases,” the press release outlined. “Effective March 1st, 2022, Dutchess County becomes one of only 9 counties in New York to eliminate county sales tax on clothing and footwear items under $110, and the only county in the mid-Hudson Valley region to do so.”

Those counties are or have been: Chautauqua County, Chenango County (outside the following) Norwich (city), Columbia County, Delaware County, Dutchess County, Greene County, Hamilton County, Tioga County, and New York City.

The sales tax exemption is a per-item exemption and doe snot include the 3/8th% MTA tax.

According to the press release, Dutchess County retailers were notified of the upcoming sales tax change by the New York State Department of Taxation and Finance. Specific details of the exemption are available online Publication 718-C – Sales and Use Tax Rates on Clothing and Footwear.

Details Of Type Of Clothing Exempt

According to the legislation, “the exemption applies only to clothing and footwear worn by humans. It also applies to most fabric, thread, yarn, buttons, snaps, hooks, zippers, and similar items that become a physical component part of exempt clothing, or that are used to make or repair exempt clothing.”

Items not included in the exemption include costumes or rented formal wear; items made from pearls, precious or semi-precious stones, or imitations; athletic equipment; or protective devices, such as motorcycle helmets.

---

What This Means For Sales Tax Collected From Beacon

New sales tax sharing agreement for 2023-2032 have been negotiated and are being signed into law. The dollar amount of sales tax generated from stores in Beacon has not been disclosed to the public by Mayor Kyriacou, who very briefly briefed the City Council at a Workshop meeting in February 2022, and more in depth at the following meeting, where the renegotiated rate was unanimously voted Yes on.

According to Dutchess County’s 2/28/2022 press release announcing this new sales tax cut: “The clothing and sales tax exemption goes into effect as the County is working with the Cities of Beacon and Poughkeepsie to update the current sales tax sharing agreement, which provides millions of dollars in sales tax revenue to local municipalities each year. The current agreement expires in 2023, and requires the authorization of each City Council, the County Legislature, and the NYS Comptroller.

“The agreement allows Dutchess County Government to continue to collect a 3.75% County Sales and Use Tax, with the Cities of Poughkeepsie and Beacon surrendering their right to receive one-half of the non-state sales and use tax (which equals 1.5%) collected within their respective municipalities. (The agreement is among these three parties because under state law, only county and city governments have the right to impose a local sales tax; towns and villages do not have that right.)

“The new agreement will be a streamlined agreement that eliminates the complicated formula for sales tax growth contained in the current agreement. The new agreement, which will run from 2023 to 2033, will be a simple percentage formula. Each of the cities will see a graduated increase in the percentage of sales tax received over the term of the agreement, with the City of Poughkeepsie increasing their percentage of sales tax collected from the current 4.59% to receiving 6.02% by 2030. The City of Beacon will go from its current 2.00% to receiving 2.62% by 2030. Local towns and villages will continue to share 9.5% of total county sales tax collected.

“Over the last 10 years, we have distributed more than $300 million in sales tax to our 2 cities, 20 towns and 8 villages. This new agreement increases the percentage of sales tax the two cities will receive, while ensuring the towns and villages sales tax revenue is protected and grows as sales tax receipts grow,” County Executive Molinaro said.

“The City of Beacon Council voted to approve the new agreement on Tuesday, February 22nd. The City of Poughkeepsie Council is expected to vote on the agreement on March 14th. It will then go to the Dutchess County Legislature for vote at the April board meeting.”

Generated Sales Tax Grew In 2021

According to a press release made by Dutchess County Executive Marcus Molinar’s office on 10/13/2021: “Dutchess County has seen revenues rebound strongly in 2021, with sales tax receipts well exceeding original projections year-to-date and continued federal reimbursement for many of the COVID-19 expenses as well as American Rescue Plan (ARP) funding. This has enabled the County to fill many of the positions that had been held vacant this year and restore full position funding in the 2022 Executive Budget, expand and enhance programs, while also reducing the property tax levy – the amount collected from property taxpayers.”

While Dutchess County indicates that they know the sales tax number generated to them by surrounding municipalities who have forfeited their right to collect their own sales taxes, the totals for each municipalities continues to not be disclosed by Dutchess County, or Beacon’s Mayor Lee Kyriacou, if that number was disclosed to him while negotiating with the county on the rate.

Dutchess County Legislature Chairman Gregg Pulver said, “At a time when many costs are going up for families, I am very proud that Dutchess County Government is doing all we can to lower costs for our residents. This sales tax exemption helps people hang on to their hard-earned money and also makes Dutchess County an even more attractive shopping destination for visitors. We have worked hard to make smart, conservative fiscal decisions over the years so we can keep providing savings to our citizens.”

Knowing the sales tax number generated by each municipality would help all Dutchess County residents know if their municipality were getting a good deal from the County when being cut a check to be used at each municipality’s digression, in addition to being provided services by Dutchess County.

Property Taxes - How Are They Paid By People Who Experienced Income Reduction?

While renters in Beacon are experiencing little protection from increases on where they live, causing some Beaconites to leave Beacon or live with anxiety of rent increases, people with qualifying mortgages backed by the Department of Housing and Urban Development, Department of Veterans Affairs, and Department of Agriculture who have escrow accounts with the mortgage company holding their account may be catching a break when their property tax to the City of Beacon, school and library come due.

The CARES ACT legislated that if a qualifying homeowner has experienced lower income due to the pandemic, they can put their mortgage into forbearance, thereby pausing payments and not incurring additional interest or penalties. The paused payments get added back into the total owned of the home, which are added to the total debt the homeowner owes. This forbearance was started by the Trump administration, and was continued by the Biden administration, who recently extended that deadline through June 2021.

Forbearance Is Set - What Does It Mean For Property Taxes?

While relief is experienced for a homeowner who lost income due to the pandemic, what happens to the property, school and library taxes that are due directly to the City of Beacon?

Some residents pay these payments directly from their own accounts, versus having the institution servicing their mortgage divide a portion of their payment into an escrow account, so that when property taxes come due, the money is there and company servicing the mortgage, like Quicken Loans or Rhinebeck Bank, makes the payment on behalf of the homeowner.

One year ago in March 2020, at the start of the pandemic, A Little Beacon Blog asked the City of Beacon how property tax was being handled. At the time, Mayor Kyriacou, who is a landlord in Beacon and owns several properties, advised us to ask state officials about it.

This year, A Little Beacon Blog inquired again, and received this response from Beacon’s City Administrator, Chris White: “The City delayed foreclosing on any properties in 2020. Normally, the City would have sent last chance agreements in March of 2020 to properties with 2018 taxes still open. In compliance with the State's COVID-19 Emergency Eviction and Foreclosure Act, the City mailed hardship declaration forms to anyone with open taxes from 2018 giving them until May 1, 2021 to pay or enter into an installment agreement. We have also not taken action on back taxes for 2019 or 2020 so there has been some flexibility.”

New York City’s City Council passed legislation in 2020 on late payment penalty interest to 0% for a period of time. As for Beacon, Chris explained: “The interest on taxes is 1% a month but is not compounded. We allow partial payments and offer installment agreements of up to 24 months for past due taxes as long as property owners remain current on any upcoming taxes (including school) while in an agreement.”

A Benefit To Escrow Accounts: Advance Payments Have Been Made For Some Mortgages

When a homeowner has an escrow account with the company handling their mortgage, that company sets aside a portion of the monthly mortgage payment and places it into an escrow account for property taxes to the City of Beacon and to the school and library. Same can be done with homeowners insurance. It’s one less bill to worry about, and makes setting aside money automatic.

If an escrow account is not used, however, then the homeowner needs to make the payment themselves. Even before the pandemic, some residents who had not disciplined themselves to save the money found it difficult to scrape the money together. With the pandemic and economic shut-down, collecting that money could be more difficult.

Property Tax Escrow Account 101

When we reached out to Dave Curry, VP Commercial Lender for Rhinebeck Bank, to inquire as to if Rhinebeck Bank was also advancing property tax payments for residential mortgages, he went beyond the question to provide some education about escrow accounts as they pertain to residential mortgages:

“Yes, we escrow taxes into the monthly payment. For Rhinebeck Bank, we do this on both the residential and commercial side. This a typical requirement as financial institutions want to be sure the taxes are being paid on an annual basis and that the borrower is in a position to do so. Some Banks will not escrow taxes if it was requested by the borrower, however, the bank is putting the trust in the borrower to be able to manage their finances enough to pay those big bills when they come! Unfortunately, most people are not disciplined enough with their finances.”

Dave continued: “Escrowing Insurance is a different story. Normally Banks do not require the escrow of insurance. So how this works is that your monthly mortgage payment is normally broken down 3 ways: Principle, Interest and Escrow. The escrow portion goes into a separate escrow account and when the Bank receives the tax bill, they cut a check from this account. Additionally, there is an escrow analysis done on an annual basis, which determines if your monthly escrow portion is enough to satisfy the annual taxes. Sometimes there is a shortage and you will have an increased monthly payment, and sometimes there is an overage where you will be cut a check from the Bank. That is pretty much the scope of it, but very common for mortgages.”

The escrow analysis is conducted for if the taxes in the city increase or the city reviews their appraisal amounts on each home, as Beacon did a few years ago after not having done it for years, which resulted in a substantial increase for property owners. The amount set aside from the monthly mortgage payment needs then to also increase in order to set aside enough property tax money.

People who are done paying their mortgages may not be in the habit of making the monthly required payment anymore, thus needing to be disciplined enough to set aside the money for tax collection time. If they have the money, during the pandemic where some have experienced job loss.

Tax Tip: Unemployment Insurance Is Taxable - Put Some Aside In Savings - Opt-In For Tax Removal - Or Opt-In For A Cancel Movement

A whole lot of Unemployment Insurance was released at the start of the pandemic when businesses were shut down or furloughed. For New Yorkers, people could receive up to $504/week (depending on how much they earned during the year), plus an additional $600/week for a limited period of time of Pandemic Insurance regardless of yearly earnings. The number of weeks a person could receive Unemployment Benefits within the year was also extended, and on December 29, 2020, was extended again into 2021.

Receiving Unemployment Insurance proved difficult, as so many people were applying at one time, and many for the first time. The New York Department of Labor’s website crashed regularly, and calling in to a person was nearly impossible, according to Gothamist and other publications. New York State partnered with Google to fix the state’s website and increase the servers powering the website from 4 servers to 50, according to Syracuse.com.

According to data analyzed by lohud.com, unemployment claims in the Hudson Valley totaled 149,134 for the time period of March 14 through April 25, 2020. The previous year during the same time was 9,344 claims. That is an increase of 1,496%.

As of today, after the passage of 2 pandemic stimulus packages, Unemployment Insurance remains taxable, as it is viewed as income, which means that if you received Unemployment Insurance, you need to either check a box that you want taxes withheld from your unemployment benefit check, or “put aside 20% federal and 6% NYS,” advises Arthur DeDominicis, a local CPA in Fishkill.

New York’s Department of Taxation and Finance issued a reminder that citizens could opt in to having taxes taken out of their benefit checks, thereby removing the problem of needing to save money to pay it the following year. The reminder included directions on how to opt-in to having taxes taken out. Otherwise, recipients of Unemployment Insurance have the option of paying in quarterly estimates, or figuring it into their year end tax filing, the legwork for which starts right now.

Recipients of the benefit will receive a 1099-G from New York State. Other unexpected income tax situations can include large payouts from things like Travelers Insurance. If you bought Travelers Insurance on a plane ticket, then got delayed and were reimbursed for your hotel, clothing and food, a 1099 will also arrive in the mail to be included in the year end tax filing, and added to your overall income.

Six states do not charge their citizens income tax on benefits, according to Experian.com, and those include: Alabama, California, Montana, New Jersey, Pennsylvania and Virginia. Seven states do not charge income tax at all, and those include: Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.

Unemployment Insurance was extended for 2021, with legislation signed by Governor Cuomo on December 29, 2020, that outlines how additional weeks of benefits will work, including an additional $300/week supplement for those who meet the requirements. There is a new compensation opportunity for self-employed people called the “Mixed Earner Unemployment Compensation” program (MEUC), which is defined as: “benefits are provided for individuals who earned at least $5,000 a year in self-employment income but are disqualified from receiving more substantial PUA benefits because they may be eligible for traditional state UI,” according to a press release by the governor.

Might New York State wave collecting tax on Unemployment Insurance? Might the new federal administration wave charging federal income taxes on Unemployment Insurance this year? Unlikely, but maybe if you ask…

How Sales Tax In Beacon Is Collected - By Dutchess County - And Redistributed

As business in Beacon began to increase years ago, with commercial rents and home prices inching up, A Little Beacon Blog grew curious about the sales tax, and if Beacon was benefiting from any increased sales tax. Furthermore, we wondered, how Beacon was benefiting tax-wise from the growing short term rental market from website platforms like Airbnb.

Nick Page, a local resident and Dutchess County Legislator, as well as managerial worker for his family’s commercial and residential property development company, Hudson Todd, LLC, in Beacon, was wondering the same thing. He embarked on a search, and A Little Beacon Blog brought on research assistant Yvonne DeMoss to pursue finding the total sales tax generated for Beacon. Despite following up with numerous offices, we were unable to find the sales tax number. Instead, we are publishing what we have found so far that helps clarify how Beacon earns back the sales tax generated here.

“Surrendering Of Rights Of Preemption With Respect To Sales And Use Tax As A Source Of Revenue”

Decades ago, Beacon, Poughkeepsie, and some other surrounding municipalities, agreed to surrender all sales tax generated in their communities to Dutchess County to manage. Dutchess County is then contracted to pay out a fixed sum from that collection of money, negotiated over the years through different contracts and mayors, back to the municipalities. You can see the contract originally signed between Dutchess County and Beacon (as well as other municipalities) here that started as far back as 1989 and was renewed in 2013 to go through 2022.

How Much Sales Tax Is Generated In Beacon?

When A Little Beacon Blog started this research project last year, we were looking for the total number of sales tax dollars generated in Beacon, so that we could see if the number was going up or down. Instead, we learned that Dutchess County pays Beacon a fixed sum over a scheduled period of time. Once we learned of the flat rate Beacon was paid by Dutchess County, we wanted to see if Beacon was getting a good deal or not, since the flat rate is one that is negotiated. In June 2019, we reached out to Beacon’s City Administrator, Anthony Ruggiero, to see if he knew Beacon’s sales tax total generated in Beacon, as compared with the flat rate Beacon receives, but he did not: “I am sorry, I would not have that information. We believe it is a pretty good deal.”

When A Little Beacon Blog inquired with then Mayor Randy Casale about it also in June 2019, he stated: “I’ve been looking for the number for 4 years!” Randy did indicate that by having a flat rate that does not change, it could put Beacon in a good position of guaranteed income, should it face a slump or dark period as is has before. This makes the annual budget more predictable. New York State Comptroller Thomas P. DiNapoli said after issuing a sales tax performance report in 2018: “As history has proven, sales tax can be an unpredictable revenue source for our local governments.”

We have confirmed that the Department of Taxation collects the amount of sales tax generated in Beacon, but will not release it, stating that tallying a total dollar figure would be difficult, as online sales gets tricky when items are purchased from a store and shipped out of state.

Jeff McLauchlin, Senior Administrative Analyst for the New York Department of Taxation, explained it this way: “Sales tax vendors collect the tax and remit it to the State Department of Taxation and Finance and the department distributes the revenue. Sales tax in New York is a destination based. One quick example: A business in Beacon sells to a customer online who lives in Saratoga. The sales tax rate is that for Saratoga and the return filed by the business should reflect the breakdown of sales to different jurisdictions properly. Purchasers who aren’t charged the correct rate or no tax at all are still responsible for paying the sales tax.” Saratoga County also collects sales tax for municipalities, but Saratoga City, a tourist destination, collects its own separately. A finance transparency tool can be found here.

Dutchess County Legislature Nick Page submitted a FOIL to the Department of Taxation and Finance in July 2019 in order to get clear numbers, and was told that the answer would take time to process, might be completed in August 2019, would have a fee for printing pages, and was not guaranteed to be approved.

The New York State Comptrollers office also states that they are not apprised of what the incoming dollar figure is, but does track the total amount for payments paid out (aka “distributions) by Dutchess County to each participating municipality. The State Comptroller’s response in May 2019 by way of Katelyn Israelski, with the Office of State Comptroller Thomas P. DiNapoli, was: “Our Local Government and School Accountability division has informed me that OSC doesn't typically monitor monthly or quarterly sales tax distributions by counties, but that data is reported annually by both the county and those local governments receiving funds.”

Katelyn then attached the historical data that they have available for Beacon for Sales Tax Revenue Distributions from Dutchess County. “Unfortunately,” she continued, “we do not have data on the sales tax generated, for which NYS Dept. of Tax and Finance is the primary source.”

The fixed dollar amount that Beacon receives from Dutchess County is as follows, as per the most recent contract through 2022:

The County shall distribute to the Cities of Poughkeepsie and Beacon, collectively, a fixed amount of money from the $25 million dollars referred to in Paragraph 2 above pursuant to Section 1262(c) of the Tax Law. The City of Poughkeepsie shall receive $9,566,212 and the City of Beacon shall receive $4,158,686 subject to the provisions of paragraph 6 below.

Beginning in 2014 and continuing through 2022 the County shall make 21 equal payments of $198,032.66 to Beacon and $455,533,90 to Poughkeepsie with such payments to be made between February 1st and December 31st of each year. Such payments by the County shall be made directly to the Cities on the next business day after receipt of the County's share of the sales tax proceeds from the State Commissioner, by wire to a designated account or by check of the County Commissioner of Finance, at the option of each City.

Beacon will not exercise its right of preemption to impose a local Sales and Use Tax pursuant to Article 29 of the Tax Law of the State of New York to be effective for each year of the term of this agreement as long as the County's Sales and Use Tax remains at no less than 3.75%.

What About Airbnb Tax Revenue?

In terms of taxes collected from Airbnb renters, of which there is a healthy market in Beacon, which was just legalized in June of 2020, Dutchess County again receives the revenue from that tax, known as the Hotel Tax, or in some cases, Bed Tax or Occupancy Tax. Says County Legislature Nick Page: “Airbnb began collecting 4% Bed Tax from Hosts using the Airbnb platform on March 1, 2017. Airbnb remits one payment to the County by the 20th of each month for the preceding month’s activity. The County received $221,918 from Airbnb in 2017. The payments are not broken down by municipality and the County does not have access to the addresses from Airbnb.”

It is unclear at this time if Dutchess County sends a payment to Beacon for a portion of the bookings made in Beacon. According to James Gazzale of the New York State Department of Taxation and Finance, the collection and tracking of the Hotel Tax resides with the county: “This is strictly a local county issue. It’s separate from our regular sales tax. The state authorizes this hotel tax, but the county imposes, administers and collects it. Your best bet is to reach out to the local county Commissioner of Finance.”

Onward! Consider this story ongoing as we learn more about taxes and where they go.

Dutchess County Projects $20-$50 Million Revenue Decline - 41% Comes From Sales Tax - Of Which Beacon Pays In

County Executive Marcus Molinaro released 2020 projections for a severe decrease in revenue to Dutchess County due to the COVID-19 pandemic. According to the release, it “includes a projected sales tax revenue decline of $20-50 million in 2020. Sales tax accounts for 41% of the County’s 2020 budget,” County Executive Molinaro said during his June 10, 2020 online Town Hall. The City of Beacon and other municipalities like Poughkeepsie pay into Dutchess County’s sales tax collection. Beacon does not keep the sales tax generated here, and is instead paid out a distribution of a fixed, negotiated amount from the cumulative sales tax collected across municipalities each year. A Little Beacon Blog conducted research into this, and reported on it here.

According to Molinaro’s statement, 3 of the sales tax payments Dutchess County has received from New York State in 2020, reflecting sales tax revenues since March 1st, have been lower than 2019. You can read about where which municipalities Dutchess County collects sales tax from in New York State, which include Beacon, Poughkeepsie and smaller surrounding municipalities.

Molinaro went on to describe a furlough program for Dutchess County employees: “In the wake of a projected $40-80 million revenue loss, Dutchess County Government has offered its workforce a voluntary furlough program, which 66 employees across various departments have volunteered for, and implemented freezes on hiring and non-essential spending. Funding from New York State accounts for 16% of Dutchess County’s annual budget and Governor Andrew Cuomo has suggested the pandemic may result in as much as a 20% cut in state aid to local counties, resulting in a projected loss of $15-20 million to Dutchess County. County Executive Molinaro continues to advocate for state and federal aid for counties like Dutchess to avoid being forced to eliminate critical services and programs.”

Property Tax Abatement Filing Extended To July 15, 2020

According to this press release, and Dutchess Business Notification Network, Governor Andrew M. Cuomo today signed legislation (S.8122-B/ A.10241-A) authorizing local governments to extend the deadline for filing property tax abatements to July 15, 2020 in recognition of the hardships many families and businesses continue to face as a result of the COVID-19 pandemic.

What is a property tax abatement? Investopedia explains here.

Assembly Member Alicia Hyndman introduced the bill, and said: "The property tax legislation I've introduced and passed in the Assembly is important to homeowners and those alike across my community of District 29 and the State of New York.”

Debt Collectors Cannot Seize Stimulus Checks In New York - Attorney General Letitia James Announced

The CARES ACT - the $2 trillion dollar stimulus package from the federal government to help Americans during the COVID-19 pandemic - has protections written in to safeguard the money being distributed. However, as this Forbes article points out, the protections against debt collection are at the federal level only. States have been left to make their own rules.

On Saturday (4/18/2020), New York Attorney General Letitia James issued a “hands off” debt collection policy against any debt collector, to make sure money stays in the hands of New Yorkers, as first reported by Gothamist. She specified that this protection does not apply to “any actions to collect past-due child support.”

In her press release, Attorney General Letitia James said: “As the coronavirus crisis continues to wreak havoc on our society, I will do everything in my power to protect the wallets of every New Yorker. Today, we are taking concrete action to ensure debt collectors keep their hands off New Yorkers’ stimulus payments. This official guidance makes clear that banks and debt collectors cannot freeze or seize stimulus funds that are on their way to New York families, and any institution that violates this guidance will face swift legal action from my office.”

A seemingly crowd-sourced or edited list of what other states are doing regarding the stimulus checks can be found here, as reported by Gothamist.

The Stimulus Check: How It Works And Why Your Amount May Be Lower

The Economic Impact Payment, otherwise known as a stimulus payment or check, began arriving this week, with direct deposits showing as available today, April 15, 2020, the usual annual deadline for submitting taxes (The filing deadline has since been autoextended to July 15, 2020. You don’t need to do anything to get the extension, but you can still file your 2019 taxes. This is all spelled out on the IRS website.)

There are a few ways this is working. Not everyone’s amount will be the same; some who are “high-earners” will receive less, and those who haven’t filed taxes in the last two years will have a chance to file via special website in order to receive the funds.

A Little Beacon Blog is not a tax professional, so please check with your own tax professional about any decisions you make or questions you have.

Payments Are Automatic - If You Have Filed Taxes Within 2 Years And Have Direct Deposit

If you have filed taxes for 2018 or 2019, and have set up direct deposit with the IRS, then the money will hit your account connected to that Direct Deposit.

If you did not file taxes in the last two years - and you aren’t part of groups who don’t need to file taxes (explained below) - then you’ll need to file your 2019 taxes. Learn about that here.

Payments Are Paper Check

If you do not have direct deposit already set up, a paper check is being mailed. If you moved since the last time you filed, you can change your mailing address here.

People Who Don’t File Taxes Can Apply

If you did not file a 2018 or 2019 federal income tax return because your gross income was under $12,200 ($24,400 for married couples), or had no income at all, or you weren’t required to file a 2018 or 2019 federal income tax return for other reasons, you can still apply to receive a stimulus payment (click here). But, if you receive Social Security retirement, disability (SSDI), or survivor benefits, or Railroad Retirement and Survivor Benefits, you don’t need to apply, as your payment information is already hooked up, and the payment will come.

However, if you have qualifying children under 17 who you claim as a dependent, and you are part of those special groups already receiving benefits, then you do need to apply here to get the $500 child credit.

How Much Will The Stimulus Check Be?

Now we are into the nitty-gritty. The straightforward answer is $1,200 for individuals who file single, and $2,400 for couples who file jointly. But - income limits offset this, reducing the amount you will receive if you are a “high-earner.” There is also an additional $500/child credit if you claim qualifying children under 17 years old.

You should read all about the amounts of the stimulus check here, but here are some highlights from the IRS website:

$1,200* for individuals:

• Eligible individuals with adjusted gross income of up to $75,000 for single filers

• $112,500 for head of household filers

• $150,000 for married filing jointly

$2,400* married filing jointly.

*$500 paid in addition per qualifying child under 17 years old (this does not seem to be impacted by “high-earner” status).

“High-Earners”

For filers with income above those amounts, the payment amount is reduced by $5 for each $100 above the $75,000/$112,500/$150,000 thresholds. Single filers with income exceeding $99,000, $136,500 for head of household filers and $198,000 for joint filers with no children, are not eligible and will not receive payments.

Some Groups Of People Not Eligible For Stimulus Payment

People who are themselves dependents (like children or elder adults), people who don’t have Social Security Numbers, or are nonresident aliens are not eligible. Read about that here.

Receipt Of Payment

The IRS will be sending a letter 15 days after making payment, showing how your payment was calculated. Read about that here.

Should You File Your 2019 Close To The Original April 15 Deadline (aka Soonish)?

Some accountants believe you should. For the backlog of filings, if you hire an accountant to do this for you, it is probably a good idea to get in line now. According to the IRS, who continues to process electronic tax returns: “As of April 3, the IRS received over 97.4 million tax returns and issued over $213 billion in refunds.”

Especially in light of social distancing at work, even for the IRS, the IRS is urging online filing and writes about it here.

MONEY: Should You File Your Taxes By April 15, 2020? Despite The Extension?

The deadline to file federal and New York State taxes has been extended to July 15, 2020. This includes individual returns, trusts, and corporations for both state and federal, as well as estimated tax payments for tax year 2020 that would otherwise be due on April 15, 2020. The decision for states to extend state filings is up to each state, and New York is one such state that has issued the automatic extension. This extension is automatic, meaning you do not need to file for an extension, or call the IRS to qualify, according to the IRS federal website, and New York State Department of Taxation and Finance. Excellent. One less thing to apply for.

But should you wait to file your taxes? If you have been paying your taxes throughout the year, either as an employee taxed in the W2 classification, or as a business owner who pays taxes in payroll, or has been making estimates, if you’re all caught up, should you keep pressing along and file your taxes?

Both the state and federal taxation websites say yes, file now: “The IRS urges taxpayers who are owed a refund to file as quickly as possible,” says the federal site. At the New York State level, the language is the same: “Taxpayers who are due a refund are urged to file as soon as possible.”

A local accountant agrees. A Little Beacon Blog checked in with Arthur DeDominicis, CPA for his guidance. Here is what he had to say: “We are still encouraging people to file especially if they have refunds coming. I’m sure they can use this refund money for their immediate needs. Self-employed taxpayers may not know if they are getting a refund or owe unless they actually do the return. Just another reason to get it done.”

In a slightly morbid direction, should anything happen to you, or to your spouse if filing jointly, you may want to have this task complete. If you are taken sick in a month or during the apex, this portion of your life could be done. Estate-planning is not fun to think about, but sometimes, during times of stress, preparation can bring focus and calm. That you are doing everything you can to put things into place around you; taking care of the things that you do have control over.

City Of Beacon's Budget Calls for Hiring 3 Firefighters, 1 Police Officer, and 1 HR Person

The 2020 budget for the City of Beacon is making room to hire more first responders and personnel at City Hall, some of which is made possible by different federal grants.

3 Career Firefighters Would Be Hired By City Of Beacon

The budget reflects the addition of three career firefighters over a three-year period in the Fire Department budget. Earlier this year, the City of Beacon received a SAFER (Staffing for Adequate Fire and Emergency Response) Grant in the amount of $537,423.15 in federal funding. The grant pays for 75% in the first two years and 35% in the third year. The total number of career firefighters in Beacon is 16.

1 Police Officer Would Be Hired For Main Street Patrol

The hiring of one police officer is in the 2020 budget, bringing the total patrol division to 30 officers. The Department’s total personnel would be 37, including the Police Chief, Captain and the Detective Division. “The intent,” according to the budget report, “is that this officer would be a dedicated Main Street Patrol.”

1 Full-Time Human Resources (HR) Position And City Clerk

A full-time human resource (HR) position is in the City Administrator budget for $65,000. “The main responsibility of the HR person,” according to the budget report, “will be to recruit new employees, retain and develop the existing work force, maintain all personnel files, employee benefits and compensation guidance, administration of civil service, training in required local and state policies, and assist in preparing policies and procedures.”

The budget also reflects the inclusion of the part-time Deputy City Clerk as full-time in the City Clerk budget (1410) for $18,685.

Climate Smart Coordinator Position Would Continue

The City of Beacon is on a mission to be more climate-smart and climate-friendly. Financial incentives are attached to this path, which are measured by a wide-ranging point system. The Climate Smart Coordinator stays on top of those points and looks for opportunities to gain points. According to a report from the current Climate Smart Coordinator, Beacon has 174 out of 300 points. The higher the points, the more opportunities open up. Currently, the coordinator is working on greenhouse gas inventories and alternative fuel structures. She is hunting for more points, and is feeling optimistic, per her presentation at the 11/25/2019 City Council Meeting. The Climate Smart Coordinator position is in the City Council budget for $9,500.

Summer Work Experience Opportunities For Beacon Youth

Included in the overall budget is $20,000 in the Recreation budget to work with the Dutchess County Workforce Investment Board (DCWIB) to provide summer work experience opportunities for Beacon youth.

Beacon's 2020 Budget Breakdown At Large

The copy of the City of Beacon’s 2020 Budget in the Beacon Public Library at the Reference Desk. You can request to read it, and you’ll find it at the Reference Desk, or download Beacon’s budget online as a PDF here.
Photo Credit: Katie Hellmuth Martin

Budget season is here, and Beacon’s budget is about to get voted on in December, on the 9th (rescheduled from December 2 due to the winter storm); it must be done prior to December 31, 2019.

We are highlighting a few areas of spending in articles to come next, but wanted to shed light on the big base numbers, and how they have been going up or down over the past few years. This abstract is from the executive report submitted by the City Administrator, Anthony Ruggiero, MPA, who credits Susan K. Tucker, CPA and director of finance for the City of Beacon, for involvement with the production of the budget.

Much of this report is excerpted in quotes from the budget report itself, which you can find at the Beacon Public Library, or you can download Beacon’s budget online as a PDF here:

About The Tax Cap

“The tax cap law established a limit on growth of the annual property taxes levied to 2% or the rate of inflation, whichever is less. This year the tax cap is 2%. There are very limited adjustments that are factored in and only PILOT payments apply to the budget this year. The cap is on the tax levy, not the tax rate.”

For Beacon: “The allowable levy at cap is $11,455,743 for the 2020 budget, which is an allowable increase over 2019 budget of $491,562. This is a 4.48% increase from the 2019 Budget and is directly related to the Tax Base Growth Factor.”

Homestead and Non-Homestead Tax Rate Decrease

The homestead and non-homestead tax rates both saw a decrease. An override of the tax cap is not being recommended, according to the budget report: “The tax cap legislation provides for an override of the tax cap with a majority plus one vote in favor of it by the governing body. This is not being recommended.”

• A homestead tax rate decrease of -6.7219%

• A non-homestead tax rate decrease of – 2.9146%

Homestead Assessed Value Increased

Did you get the letter in the mail about your Assessed Value of your home? Did it increase? It did for a lot of people who moved here some years ago, which, according to Mayor Casale and the City Assessor, Kathy Martin, is an expected catch-up, as they explained during a City Council meeting about where the housing assessments should be.

THIS YEAR:

• The homestead assessed value increased by 12.33% or $113,555,017.

• The non-homestead assessed value increased over last year by 6.94% or $18,784,639.

Overall Assessed Values Seeing An Uptick Since 2010

According to the report: “This year represents the sixth year since 2010 that the overall assessed values increased, and did so by $132,339,656. For the first time in 10 years, the Homestead values are $11,457,133 more than it was in 2009.”

Assessed Values Increasing, But Still Lower Than 2008

The report points out that the assessed values are not where they were at the height of the real estate market in 2008: “Homestead values remain $15,586,532 less than it was in 2008. The non-homestead assessed value has fluctuated through the years, and while it increased $18,784,639 this year, it is only the 3nd year in a row that it has been more than in 2010.”

The Fund Balance

The future projection of the Fund Balance is as follows: “This budget utilizes a fund balance amount of $379,842. This is an increase of $26,271 from what we’ve utilized in the FY 2019 Budget from Fund Balance and Debt Reserve. Each year with the improving economy and new developments on the tax rolls, the budget and assessments continue to strengthen. The future non-reliance on fund balance appropriations to balance the annual operating budget will help to provide for a more reliable and sustainable fiscal condition and to better allow the City to adjust during difficult fiscal times.”

CORRECTION: Public Hearing for Beacon's 2019 Budget Was November 19th

In last week’s article on Beacon’s taxes, we mentioned that the Public Hearing for the 2019 Budget would be Monday, December 3, 2018. That information was based on the Mayor’s letter in the Budget Presentation, submitted in October.

However, the Public Hearing for the 2019 Budget was announced and scheduled for Monday, November 19, 2018. The vote is scheduled for Monday, December 3, 2018.

Beacon Remains Under 2% Tax Cap For 6th Year In A Row

If you got a refund from your property tax escrow account for being overestimated, this could be why (although we’re not property tax experts, but a refund did come our way this month). Mayor Randy Casale presented Beacon’s 2019 Budget in October, and stated: “In this year’s budget our homestead tax rate shows a decrease of 1.6518% and the non-homestead rate dropped 1.8073%.”

Before presenting the complex layers of a city’s budget, the Mayor also pointed out: “This is the fifth year in a row that we have received a ‘no designation’ classification from the NYS Comptroller’s Office with a score of 5. We have an Aa2 Moody’s bond rating. This shows our tax dollars are being managed thoughtfully and responsibly. This is the sixth straight year we were able to stay under the 2% tax cap while continuing to provide the services that keep our city safe, invest in our infrastructure and improve the quality of life for our citizens.”

Anthony Ruggiero, the City Administrator, reminded readers of the 2019 Budget Presentation of the history of the tax cap: “The tax cap law established a limit on growth of the annual property taxes levied to 2% or the rate of inflation, whichever is less. As you may recall, last year the tax cap was actually 1.84%, however this year it is 2%.”

Select Increases Projected For Certain Line-Items In The 2019 Budget

Water and sewer rates will show increases: 5% for water and 10% for sewer. Said the Mayor in the 2019 Budget Presentation: “These increases will allow us to continue to make upgrades to both facilities and our aging infrastructure.“

Infrastructure upgrades have been going on in Beacon on several neighborhood streets since the summer. There was a sewer collapse on Main Street at Tioronda, which closed the street to cars for several days, and negatively impacted neighboring businesses, like Raven Rose who experienced sewage backup into the shop.

Says Emily Burke, owner of the kitchen store Utensil, which until very recently was located on the eastern end of town (she has since moved to the west end of town, with an expanded shop): “The ongoing construction certainly had an impact on all the east end businesses.”

Also significant is the retiring of Beacon’s Building Inspector, Timothy Dexter. He served the city for 36 years in several roles, including Firefighter, Building Inspector, Fire Lieutenant, Acting City Administrator, “and mentor to many,” Anthony stated in the budget presentation letter.

The position of the Building Inspector will remain, but move to the Building Department’s budget, and away from the Fire Department’s budget, where it was previously. Building Department staff will remain the same, and the number of firefighters (13) and fire chief (1) will remain the same.

There are other highlights of what budget line-items are increasing or decreasing, which you can see here in the budget itself.

Recycling Market Crash Significantly Impacts Beacon’s Budget

The City Administrator stated that Beacon will keep weekly recycling, but at a loss to what was budgeted previously. “This is significantly impacted by the collapse of the recycling industry. The City went from receiving a revenue of $15 a ton to an expenditure of $61 a ton. This, combined with the increases in garbage contracts, amounted to $99,698 increase in the general fund expense budget.“

If you need to see things visually, as a line-item, this could look like +$15/ton as income to Beacon, and now looks like -$61 as an expense. The collapse of the recycling market was predicted for years by business leaders in the recycling industry, and was triggered by the Chinese decision in January 2018 to buy almost none of the recycled paper pulp coming from the United States. (A reminder: When putting goods out for city recycling, all recyclable paper and plastic must be dry and clean. Rinsed and not soggy. Otherwise, if the plastic is coated in food or dirty, or the paper soggy, it does not get recycled.) A Little Beacon Blog hasn’t gotten an official quote on where non-purchased recycling goes if it’s rejected and not purchased by China.

Beacon Homestead & Non-Homestead Assessed Value Increased

As explained by the City Administrator in the budget presentation: “This year the homestead assessed value increased by 3.47% or $30,859,063 million. The non-homestead assessed value has also increased over last year by 9.65%, or $23,815,921. This year represents the fifth year since 2009 that the overall assessed values increased, and did so by $54,674,984. Homestead values remain more than $102 million less than it was in 2009. The non-homestead assessed value has fluctuated through the years, and while it increased approximately $23,815,921 this year, it is only the second year in a row that it has been more than in 2009.”

Public Input Scheduled For November 19, 2018

CORRECTION: This section originally stated December 3, 2018 as the Public Hearing. According to the Mayor’s letter in the Budget Presentation, that was the date set. However, the Public Hearing for the 2019 Budget was announced and scheduled for Monday, November 19, 2018.

Department heads have been meeting in workshops throughout the fall. Workshops are open to the public to watch, but not participate in. A Little Beacon Blog republishes workshops here to help increase accessibility to these videos and agendas of the meetings. The opportunity for the public to come out and contribute their opinion on the 2019 Budget was Monday, November 19, 2018 at 7 pm at City Hall. This is the white building near the train station that also houses the police station and courthouse.