If you live in the city of Albany and own property valued at $200,000, you will pay about $1,600 annually in property taxes to the City. It may be a few dollars less than that number, but I have rounded the amount to the nearest hundred to simplify the math. Many of the numbers I am using are approximations and none conform to Generally Accepted Accounting Practices (GAAP) because it becomes very complicated to explain all the intricacies of government fund accounting in a 500-word column. I can, however, justify every number I use and vouch for its accuracy.
Most of your property taxes will go to pay for police and fire services. These services receive about 83 percent of the resources in the City’s General Fund, while the library gets about 8 percent and Community Development 4 percent. Nondepartmental functions, mostly the General Fund contingency amount of $1.2 million, receive a little more than 4 percent. The Parks & Recreation Department also receives property tax support of about $4 million annually, which would be the equivalent of something less than 13 percent of the General Fund.
Property taxes are flexible or fungible dollars that can be used to pay for any city service, but many of the dollars we receive can only be used for specified purposes. Most cities put most of their property tax revenues into a General Fund that covers services that do not have an independent revenue source. In other words, if a service can’t be paid for by user fees, it is usually a part of the City’s General Fund. Very few cities use property tax dollars to pay for utility services like water and sewage treatment, which are generally reliant on usage-based rates. Rate money, building inspection fees, and Systems Development Charges are examples of funds that can only be used for purposes specified by law.
Through December of this year, or halfway through the fiscal year, the City has spent about $45 million; and it is likely we will spend something close to a total of $90 million by the end of the year, although this number could rise significantly if there is a major capital project underway. The Water, Sewer, and General Funds account for about $32 million of the money spent so far this year. Other funds that have spent more than $1 million include Parks & Recreation, Street, Capital Replacement, and Ambulance. I look at the City’s fund balance report, which includes revenues and expenditures to date, nearly every day to see a quick summary of our financial position.
The City is routinely accused of hiding money or spending it unwisely, usually by people who haven’t taken the time to look at the budget or the daily financial reports that are available on our website. I think one of the problems that interferes with a good understanding of city finances is the complexity of government accounting rules that are necessary for accurate reporting, but beyond what most of us know about tracking income and expenses.
My personal view is that I receive good value for the $1,800 or so I pay in property taxes to the City, and I know the money is being properly accounted for and reported. I don’t always agree with how we spend every dollar, but I have great confidence in our finance staff, the audit, reporting awards, and bond ratings that help insure appropriate financial management.