Smithtown Supervisor Patrick Vecchio recently cited concerns about producing budgets within the state-mandated 2 percent tax cap, predicting that future governments will face layoffs and steep service cuts.

Vecchio told members of the Kings Park Civic Association that future governments face those possibilities because the tax cap doesn't take into account rising health and workers' compensation insurance costs, or emergencies.

"For example, it's not our fault that health care costs go up a half a million dollars [a year]," he told the group meeting at Kings Park High School. "It's not the fault of the government. So they ought to give us that break and exclude that extra $500,000 as being part of the levy. It doesn't work that way."

In Smithtown's case, the town can only levy .73 percent more than last year's $55 million, Vecchio said. That equates to about $400,000, which alone won't cover the health care increase.

About 40 town government positions remain unfilled after workers retired or quit, and the money for those jobs was allocated in the surplus account, Vecchio said. Surplus money is used to meet the tax cap, but the supervisor said that's a "double-edged sword" because bonding agencies have threatened to lower the town's credit rating if it funds budgets using surplus money.

Smithtown will also lose anticipated revenue from mortgage taxes, which Vecchio had previously projected would be around $4 million, but is only about $3.3 million for 2016, he said. A decade ago, taxes from home sales generated about $11 million for the town, Vecchio said.

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In a brief interview after the meeting, Vecchio said he didn't plan to cut services or lay off town employees when crafting the 2016 budget. "Jobs will be going by attrition," he said.

Vecchio said Friday that he does not intend to pierce the tax cap. He must submit his preliminary operating budget for 2016 to the town board by Sept. 30.