City Treasurer Joe Hogenkamp thinks that it’s unfair for Tonawanda to continue to raise property taxes on already highly burdened residents and that the City’s current fiscal trends are unsustainable. He is retiring later this year – and some local Democrats are postulating that the fiscally conservative accountant, a registered Republican, could be the party’s strongest contender for the 60th district seat to challenge incumbent Republican Chris Jacobs.
“The city is struggling financially. We need to make a decision on what services we can afford to provide. We are averaging 5 to 6% property tax increases over the last five years. That’s the trend. We’re struggling to maintain a fund balance that can support our operations,” Hogenkamp warns. “Are we going to continue to raise taxes by 6 to 7% a year — or are we going to reduce the level of services we provide to our residents?”
Hogenkamp estimates that 75% percent of the City’s budget is spent on personnel and benefits. The City’s spending is on services, not janitorial supplies and reams of paper, he explains.
“The average taxable assessment in the City is about $118,000. The question becomes, can a person who owns a house whose taxable assessment is $118,000 continue to afford the level of services that we are billing their property for every year? That’s the question,” he tells The Chronicle.
“If you’re going to keep the taxes down – and you have a state property tax cap — with our current level of services in place, holding to 2% is unrealistic and unattainable,” he argues.
Hogenkamp has been an accountant for 32 years, and notes that some have called him “Chicken Little” and have accused him of “crying wolf”, because his posture has always been that of a fiscally prudent accountant. He explains that he has been sounding the alarm bells for a long time, and is hearing from City residents that they can’t afford five more years of 6 to 7% property tax increases, the current trend line.
“The Mayor is trying to grow the tax basis. He’s trying to develop residential property. There is a development that has been talked about for many years, since previous administrations,” he explains. “The reason things aren’t moving forward more quickly, and I understand, that he doesn’t want to settle. He was elected to carry out his vision.”
“As far as Spaulding goes, tenants have wanted to go in there that have had visions that are different than his. I get that. I’m not going to criticize his administration,” he adds, noting that it’s important for all public officials to cooperate and respect each other.
“I’ve tried to articulate that, the level of services we provide, spread over 6,000 taxable properties, is a real problem… It becomes a solvency problem for the city when you can’t sustain the organization you created. It becomes a solvency question when it gets out of our control,” he argues.
“We have been at the same level for 10 years in terms of state revenue aid. The state has given us 0% interest money for sewer upgrades, which cost $30 million. They helped remediate the Spaulding property. Whether they explicitly said it or not, the message the state is sending to me, through their actions, is that they will help with big capital projects like environmental remediation and sewer infrastructure – but they don’t want to fund operating expenses for services being provided to residents. They are not going to increase state revenue aid,” he surmises.
Hogenkamp thinks that much of the answer is in service sharing with adjacent municipalities, in order to share services and spread costs over a larger tax base. He notes that the City had its own sanitary sewer treatment plant until the early 1980s, when they decided to abandon the plant and to partner with the Town of Tonawanda and Village of Kenmore to provide the service.
He also notes that in 2004, when the City got out of the water business and turned over its operation to the Erie County Water Authority. Later, the City got rid of its landfill and incinerator, in order to get it out of the community.
“Shared services have to always be on the table,” he asserts. “I’ve been an advocate for taking these steps in little bites. I think the City of Tonawanda can stay the City of Tonawanda, but it’s a question of what services we are going to be providing and how.”
Hogenkamp explains that there is a lot of uncertainty in a City budget process – from sales tax collections to snowfall, workplace injuries and lawsuits.
“I’m about worse case scenarios,” he describes himself.
As of now, he isn’t planning to seek higher office.