The Oyster Bay Town Board on Tuesday passed a 2017 budget with an 11.5 percent property tax levy hike that officials said is necessary to restore the town’s fiscal condition and save union jobs.
The tax cap-busting hike is expected to raise $24.1 million and increase the average homeowner’s yearly tax bill by an estimated $172, town finance director Robert Darienzo said.
The board approved the hike after financial experts and the local union president spoke during a hearing on piercing the tax cap. The hearing had been postponed twice.
“The town is in difficult financial straits,” Town Supervisor John Venditto said at the meeting. Venditto said the town had spent a lot of money on infrastructure in past years without raising taxes. “We have a financial problem, it is fixable.”
Venditto asked residents to “keep it in perspective” that cable and heat and electricity bills annually cost more than town taxes. The town board raised property taxes by 8 percent in 2015 and 2014.
In September, Venditto proposed a $284.1 million budget that would have increased the property tax levy by 2.3 percent, which would have been within the cap, by using unused financial capacity from this year.
Town finance director Robert Darienzo said that, although the proposed budget was balanced, it did not address the cumulative deficit, which was of concern to investors in the town’s bonds.
“A failure to pierce the cap today will only exacerbate the problem in 2017 and increase interest costs and require a considerably higher tax increase in the 2018 budget,” Darienzo told the board.
Standard & Poor’s in April downgraded the town’s credit rating to junk status, which drove up the cost of borrowing. The town’s financial adviser, Christine M. Crowley, warned the board Tuesday that it had lost or would lose market access to the financial markets as more than $100 million of short-term debt would need to be refinanced in 2017.
Included in the tax levy hike was about $4 million that would reduce the need to find more than $7 million in cuts to offset pay cuts or layoffs of town employees.
Civil Service Employees Association Local 881 president Jarvis Brown asked the board to pierce the cap to save union jobs. Afterward he said they needed to “get back to the table” and negotiate a new contract to replace the one that expires Dec. 31.
“We need to get to the point of no one getting laid off,” Brown said.
Robert Freier, former Democratic candidate for the town board, said taxpayers and town employees were being asked to foot the bill for wasteful spending.
“Why should the residents of this town have to pay for this mismanagement?” Freier said.
The board voted six to one to approve the budget with Councilman Joseph Pinto voting against it. Councilman Anthony Macagnone voted for it but said the town should have a financial control board imposed by the state.