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Real estate slump, shortfall in jail cell rent are squeezing county budget

QUEENSBURY The prevailing real estate slump, including an unexpected decline in demand for jail space, is crimping Warren Countys budget in a big way, county officials said this week. Warren County is likely to lose up to $1 million in real estate mortgage taxes and county clerks fees due to skidding real property sales in 2008 if those tax rates and fees arent hiked, county Board of Supervisors Chairman Fred Monroe said Monday.. The county is also likely to earn about $500,000 less during 2008 in jail rental revenues than it budgeted, he said. The county is holding two public hearings Fri. Aug. 15 to raise the mortgage tax from 1.0 percent of sale price to 1.25 percent. The increase doubles Warren Countys share of the take from .25 percent to .50 percent, Monroe said. The county is also seeking to quadruple recording fees for transactions from $5 to $20, and hike additional-page recording fees from $3 to $5. These increases were just allowed by a vote of the state legislature, County Clerk Pamela Vogel said, to raise a fee cap to try to alleviate some of the financial pressure on the counties. The Warren County jail, opened in 2004, was built larger than the local demand called for, so jail cells could be rented out at a profit to surrounding counties who had excess prisoners and aging jails. But now that expected profit has all but evaporated, county officials said this week. Surrounding counties who used to board prisoners in Warren Countys lockup built their own new jail capacity, and demand has slumped, leaving a shortfall of $500,000 less than budgeted for 2008. Prior Budget officer Nick Caimano, county officials said, budgeted an increase in jail cell revenue although new jails space was on the horizon for neighboring counties. Caimano also budgeted for an increase in mortgage tax revenue, they said, but residential sales have been slumping. The county took in $1.6 million in mortgage taxes in 2007, Vogel said, and the county budgeted this tax revenue to increase to $2.1 million for 2008. However, during the first half of 2008, only $504,656 has been collected from the tax. Caimano had expected the mortgage tax hike to be passed earlier in the year, which would have accounted for some of the deficit, Monroe said. Also, Monroe said the that the state Corrections officials might not allow the county Sheriffs Dept. to close down a wing of the jail or reduce staffing, even though the wing might be empty. Can we do anything? I dont know, he said. Ive heard we have to operate the jail full bore. Budget officer Kevin Geraghty said these shortfalls were serious, even in light of the unexpected 5 percent increase in sales tax revenues and apparent $1.4 million projected windfall this year from the trash plant operation, attributable to boosted electricity generation revenue. By Monday evening, a meeting of the countys budget committee had been scheduled for Thursday. The shortfalls are serious and well be looking at cuts to the 2009 budget wherever we can make them, Geraghty said.

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