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New Expenses Might Force Village to Pierce Tax Cap

Bond interest and snow removal are two new expenses in village budget this year.

The village of Port Jefferson has completed one its scheduled budget workshop meetings on March 12 and as reported by The Port Times Record, Treasurer Don Pearce introduced a $9.7 million proposed budget, an 11 percent increase over last year.

There are two principal drivers of an increase in the budget, according to discussions at the March 5 public board of trustees meeting.

The first is a $5.5 million voter approved roadway repair bond that the village must begin paying back. A $325,000 principal and interest payment on the bond will roll into next year’s budget.

The village will also have to begin paying for its own snow and ice removal as of next winter, an expense that in the past was reimbursed by Brookhaven Town.

“We’re going to be budgeting $140,000 for snow removal but we’re not going to be reimbursed,” said Mayor Margot Garant.

In a conversation earlier last year with Patch, Brookhaven Town Councilman Steven Fiore-Rosenfeld said that eight villages including Port Jefferson have been put on notice that the Town will not reimburse for snow removal starting December 2012.

The practice of paying back villages for snow removal had been going on for 50 or more years according to Rosenfeld and it will be eliminated this coming winter.

In order to pay for these new expenses, the village is seeking to override the 2 percent tax cap imposed by New York State. Unlike school districts, villages have had an easier time getting the public behind the override since the amount of money is of a much smaller proportion to a resident’s overall tax bill.

Another expense for the village are higher pension and health care contribution costs.

“Everyday villages are overriding the tax cap,” said Pearce at the board meeting.

Pierce explained that unlike a school districts, new principal and interest payments on approved debt for villages can’t be added to the formula when figuring out the tax cap limit. For school districts certain budget items allow it to legally raise the tax levy higher than 2 percent without needing a 60 percent voter approval on the budget.

If limited by 2 percent tax cap, the village would have to cut $350,000 out of budget just to make the debt service payment, according to Pierce.

In order to pierce the tax cap the board must first vote to authorize the village to do so.  If 60 percent of the board votes to override the cap, then the village retains the option to do so if it needs to. It does not mean that the tax levy will definitely increase above 2 percent. The board plans to vote on the override on Monday.

Voting to increase the tax levy above the cap will only be effective for the current budget year and if the village sought another exemption next year it would have to go through the same process again.

Pearce estimated that the village will need to go about 6 percent above the cap for a total of 8 percent increase in the tax levy. The current tax rate for the village is $22.14 per thousand, so a 10 percent total increase to the levy translates to an additional $2.14.

Village resident Phil Griffith said that the 2 percent tax cap for villages seemed unrealistic to him. He asked other villages might seek exemptions as well.

“Villages? Yes. Schools? I doubt it,” Pearce said. “I’m not sure if that will happen on any community on Long Island.”

The village has another budget workshop scheduled for March 26 at 6 p.m. A public hearing on the budget will be held on April 16.

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