Two country neighbors, the towns of Gallatin and Taghkanic in southern Columbia County, have a lot in common: rolling vistas of wooded, sparsely populated hills, abundant farms, and little commercial activity or road traffic to disturb the tranquil surroundings. But beneath their rustic setting, in the realm of budget discipline and financial health, the two adjacent towns are worlds apart.

Taghkanic has seen its town property taxes rise by over 50% in the past three years, while Gallatin’s have declined by 20%. Though both towns have received windfalls from mortgage tax receipts and speeding ticket proceeds, Gallatin has squirreled away its surplus while Taghkanic has used the extra revenues to fund its more expensive highway operations and government budget. Looking ahead, Gallatin residents could see additional major reductions in their town taxes and still leave the town with plenty of money to finance a proposed new justice court building; Taghkanic’s citizens are likely to see more tax increases even if they do not replace a cramped, rickety town hall that hasn’t been renovated in over 20 years.

Through a detailed comparison of the two towns’ finances, the first in a series of similar columns, we hope to illustrate some of the key fiscal benchmarks and budget disciplines that characterize the better- managed towns in our area and to raise financial questions that voters should be asking their candidates for local office as town elections approach this fall.

Every town is unique, and comparative statistics alone do not address the quality of the services townspeople are receiving in return for their taxes: Is road maintenance better in Taghkanic, which last year spent more than twice as much as Gallatin per road mile for snow removal? Will Taghkanic, which expects to spend nearly $70,000 on its new Comprehensive Plan, wind up with a better document than Gallatin’s, which should come in under $20,000? These qualitative questions are best posed by citizens directly to their elected officials. Our numbers, hopefully, can give them a starting point for discussion.

Taghkanic, with a population of about 1,100, raised more than twice as much in town property taxes this year as Gallatin, with its 1,400 people, or nearly three times as many dollars per resident ($518 vs. $185, excluding fire protection).

“Every one of my departments is very, very good about spending money,” said Gallatin Supervisor Lynda Scheer, who has directed the town’s finances for the last four years.

“We have a lot of part-time residents,” Taghkanic’s supervisor, Elizabeth Young said, citing the large number of second-home owners in her town as an unusually heavy burden on the budget she has overseen for the past two decades. U.S. Census figures from 2000, however, indicate that 23% of Taghkanic’s housing units are “recreational” homes, little different from Gallatin’s 22%.

On the single largest budget item, maintenance of the towns’ roads, Gallatin’s actual expenditures last year were $10,200 per road mile; Taghkanic spent $13,100 per mile, or 28% more. One key reason is that Gallatin covers its 41 miles of roads with a highway department staff of four, including the superintendant, according to Supervisor Scheer, while Taghkanic employs seven men to service its 49-mile network, Ms. Young said-- 75% more employees to handle 20% more road mileage.

Supervisor Young suggested that Taghkanic’s per mile snow removal costs last year were twice as high as Gallatin’s because most of her town’s roads are unpaved and, therefore, more expensive to plow and maintain. Studies cited by the Cornell University Local Roads Program, however, indicate that annual maintenance costs of gravel/dirt roads are actually less than for paved roads if traffic volumes are light (less than 100 vehicles per day) and only 20-50% more expensive to maintain if volumes are higher (100-200 vehicles per day).

On non-highway cost comparisons, Gallatin also shines, spending about $291,000 in 2006, or $194 for every resident, compared to Taghkanic’s general government expenses of $320,000 or $286 per resident. Taghkanic’s costs for planning, zoning, and justice court services were notably higher than Gallatin’s.

Though neither town manages its own fire district, contracting instead with several nearby fire departments, there is a large disparity in the cost of securing outside fire protection. Gallatin taxpayers in 2007 will spend an average of $168 for each of the 913 housing units in the town identified in the 2000 U.S. Census, while Taghkanic residents will pay $244 per house on average for their fire protection. One reason is that most of the Town of Taghkanic is served by the Taghkanic Volunteer Fire Department, which offers expensive retirement benefits to its crews. Gallatin contracts primarily with other nearby departments which are less expensive.

A final area of comparison looks at the surplus cash the towns have built up over many years. Town boards estimate their expenses and revenues each year and raise property taxes to fill the expected gap. If they underestimate other revenue sources, such as their share of county sales and mortgage taxes, or if they overestimate expenses, the resulting surplus cash is retained in the town’s bank account as unspent “fund balances.”

In the case of Gallatin, which has no outstanding debt, the fund balances have accumulated to more than $1.6 million, nearly six times the 2007 town tax bill. Taghkanic’s extra cash, after deducting $150,000 in town debt, was some $280,000, less than 30% of its 2007 levy.

Gallatin’s surplus, even after reserving $500,000 for a proposed new justice court building, is large enough that its town board should consider offering rebates to property owners or slashing taxes for the next few years.

“If I can help out our residents (by cutting property taxes), I’m willing to do it,” Gallatin Supervisor Scheer said, noting that the details of how and when to give back the surplus cash can be problematic.

But it’s a problem any town would like to have.