Public hearing on law authorizing town board to override tax cap set for tonight

Riverhead officials will hear public comment tonight on a proposed local law authorizing the town board to override the state-imposed property tax cap for fiscal year 2016.

Supervisor Sean Walter’s tentative budget calls for a property tax levy increase of 5.06 percent to fund operations in the coming fiscal year. Riverhead’s 2016 tax levy limitation is 2.06 percent. The difference is $1.23 million in a spending plan of $42.8 million.

In order to override the tax levy limitation, the town board must adopt a local law authorizing the override. The vote authorizing the override must come before the vote on adoption of the budget, though both votes may occur on the same day. State law requires the town board to adopt a budget on or before Nov. 20. For an explanation of the budget process, see: Town budget 101: What you need to know to sort budget facts from spin (Sept. 30.)

In the alternative, to comply with the statutory tax levy limitation, the town board could cut $1.23 million from town-wide fund spending in the supervisor’s tentative budget. It might also cut some spending and increase non-tax fees to equal $1.23 million and bring a budget in that complies with the statutory cap.
delivered by the supervisor on Sept. 30.

The board on Oct. 6 voted 4-0 (Councilman John Dunleavy absent) to schedule tonight’s public hearing on the law authorizing the override. The hearing is scheduled to begin at 7:05 p.m.

A public hearing on the 2016 budget has already been scheduled for Wednesday, Nov. 4. State law requires the town to hold the budget hearing on or before the Thursday following the general election (which this year is Tuesday, Nov. 3).

What happens if the town board refuses to adopt the law authorizing the override and also fails to amend the supervisor’s a budget so that it complies with the statutory tax levy limit is complicated. The tentative budget becomes the final budget, with the unauthorized tax levy increase in excess of the statutory limit, the supervisor said.

The $1.23 million difference — the increase over the statutory limit — will subtracted from any tax levy increase allowed next year, leaving the town with a negative levy, according to Brian Butry, deputy press secretary for N.Y. State Comptroller Thomas DiNapoli.

The consequences of that would be awful, Walter said. “That’s good for junk bond status,” he said.

The current town board has adopted a budget only once in the past six years. In the five of the six years of their tenure, the four council members allowed the supervisor’s budget, without revision, to become the adopted budget by default.

Since receiving the budget plan from the supervisor on Sept. 30, the town board has not had any budget discussions in public session.

The supervisor’s tentative budget calls for a tax rate increase of 4.08 percent, which is $51.029 per $1,000 of assessed valuation. That’s up $2 per thousand over the 2015 town tax rate.

Walter says an “average” single-family home with an assessed value of $50,000 (an assessed value that translates into about $350,000, he said) would have a town tax hike (excluding special district taxes) of about $100 in the coming tax year.

When special district and other separate funds are taken into account, overall spending in Walter’s 2016 tentative budget tops $92.7 million, up 1.4 percent from $91.5 million in overall spending this year. The special district property tax levies proposed by the supervisor — water and sewer districts, for example — do not exceed the statutory cap.

Editor’s note: This story was amended post-publication to reflect the comment of the state comptroller’s office.