MASSENA - The county’s new workers’ compensation formula may lead to a decrease in village taxes for taxpayers in Massena, according to Mayor James F. Hidy.
“This will save the village of Massena close to $200,000,” he said, adding that each $50,000 saved equals roughly 1 percent of the village’s tax levy.
With the new formula, which put will put less emphasis on a community’s assessed value and more emphasis on the number of employees and the jobs they perform, the village will save approximately $196,135.50 based on their projected payment for 2015 compared to what they would have been billed under the old formula.
According to data provided to county legislators, the village could have expected to pay $366,090.50 for 2015. Under the new formula, their projected payment drops to $166,955, which is significantly less than the roughly $319,000 they paid for 2014 and even less than the approximately $195,000 they paid for 2013.
“This news means that going into next year’s budget taxpayers will see a substantial reduction to the overall budget, which should lead to a decrease in their taxes,” Mr. Hidy said, adding this year’s tax rate increase was due largely to the increase in costs for workers’ compensation and other employee benefits.
Massena Town Supervisor Joseph D. Gray said thew new formula will actually result in a slight increase in costs for the town of Massena, but he said he was still supportive of the measure since the changes to billing formula place less importance on a municipality’s assessed value.
For years, the county has used a formula for the self-insurance plan so that participating towns, villages and the city of Ogdensburg pay their annual share based on 70 percent property assessment and 30 percent on the amount paid for experience over the past three years.
The new formula will reduce the ratio assigned to property assessment from 70 percent in 2015 to 60 percent in 2016 and 50 percent in 2017. It places employees into risk categories. For example, a highway worker is high risk while an office worker has a lower risk. The formula also transfers to the county the cost of insuring firefighters and rescue squad workers, whether they are volunteer or paid.
Mr. Gray said there was never any reason for worker’s comp costs to be connected to a town’s assessed value.
“Worker’s compensation insurance covers a group of people who perform specific jobs. There is no connection to property values,” he said.
The town of Massena was billed $252,663.85 for its worker’s compensation costs in 2014 and $312,590.25 in 2013. The town, under the new formula, will be billed $213,824 for 2015, a slight increase over the $207,333.85 the town would have received under the old formula.
Town bookkeeper Nancy Fregoe said the costs are shared by the various town entities based on each group’s salaries. In 2014, for example, the hospital was billed $211,410.80, Massena Electric paid $13,301.62, the rescue squad was assessed $6,463.69 and the cost for the town government was $21,483.74.
Mr. Gray said he hopes county officials continue to review their billing formula for worker’s compensation costs.
“It’s a small change for us. That’s good. The best thing is that they need to keep looking at it. I appreciate it is a complicated issue and expect we will do better next year. Nobody can explain any connection between worker’s compensation costs and the assessed property of towns with significant tax bases like Massena. We don’t have infinite resources to be able to subsidize other communities in the county,” he said.
He said the town of Massena generates the most property taxes from the county’s municipalities as well as the highest sales tax revenues. The Massena town supervisor also suggested funds allocated to the RVRDA are now used to subsidize the operation of the St. Lawrence County Industrial Development Agency.
“I understand the larger communities use more county services like social services, but that doesn’t mean we should be subsidizing the other municipalities in the county. I understand there are a number of small towns that have it tough, but that is where the county has to make some tough decisions,” he said.
Mr. Hidy said the formula change will be a tremendous boost when village officials begin development on their 2015-16 spending plan.
“As you may recall, the 2014-2015 budget saw an increase due to the costs associated with workmen’s comp and health care. This change in formula will greatly benefit the taxpayers of Massena,” he said.
Mr. Hidy was one of three mayors from around the county who joined up to lobby the Legislature for changes to the formula.
“I would like to thank Mayor Steven Yugartis (Potsdam) and Mayor Jim McFaddin (Norwood) for joining me in lobbying the Legislature to make this tremendous change,” Mr. Hidy said.
“I would also like to thank the St. Lawrence County Board of Legislators, in particular our representatives to Massena, Greg Paquin, Tony Arquiett and Jonathan Putney, as well as Fred Morrill, County Attorney Michael Crowe and Elizabeth Major of the workmen’s comp department for working on behalf of the villages and townships in the county to develop a fair and equitable formula that more evenly distributes the costs across the county,” he said.
Staff writer Ryne R. Martin contributed to this story.