Facing lowest tax cap ever, towns look to put off ambitious projects, hiring
New parking options, additions to the police force and a new animal shelter are just some of the initiatives that town officials have said they may need to delay due to tax cap restrictions. Credit: Steve Pfost / Randee Daddona
Municipal officials across Long Island will delay critical infrastructure and public safety projects -- from adding five more police officers in Southold to building a parking garage in Huntington's busy downtown -- as they struggle to stick to the lowest state property tax cap in history.
The state's baseline cap on property taxes for 2016 -- at 0.73 percent -- has fallen to below 1 percent for the first time since the cap was imposed in 2012. It was 1.56 percent for 2015. The limit on property tax hikes is 2 percent or the rate of inflation, whichever is lower, and includes some exceptions for municipalities with high litigation or pension contribution costs, or for staying under the cap before.
Citing the 2016 cap, some Long Island town officials say they will not pierce it and are working to find savings for their tentative budgets, which are due "on or before" Wednesday. To stay under the cap, officials in a number of towns say they will not hire for some open positions and will be forced to delay key projects.
'There's no wish list'
For example, in Southold, Supervisor Scott Russell said he wants to add up to five police officers to the town's 51-officer department, but that is "exceedingly unlikely" because of the low cap. In Huntington, Supervisor Frank Petrone said a plan to create a downtown parking garage is delayed, as is a plan for improving many of the town's parks.
"No new initiatives," said Petrone, who had hoped to hold two referendums this year for the parking garage and improvements to public parks.
"Under the tax cap, the best we can do is maintain the services we have," said North Hempstead Deputy Supervisor Aline Khatchadourian, who said the town is under a directive from Supervisor Judi Bosworth to have no layoffs and to stay at or under the cap. The town gained praise for launching a 311 call center in 2005 and the senior program Project Independence in 2009, which offers transportation for seniors to doctor's appointments and grocery stores.
But this year "there's no wish list," Khatchadourian said.
Brian Butry, a spokesman for the state comptroller's office, said staff, service, and program reductions are "the new norm for local governments."
Towns have been steadily spending less on infrastructure projects. Local governments spent about $1.2 billion on capital needs for transportation, water and sewer systems in 2012, down 8 percent from 2010, when $1.3 billion was spent, according to a 2014 state comptroller's report. To keep up with infrastructure needs, the comptroller's office says municipalities should spend about $3.9 billion annually on capital investments.
Babylon Supervisor Rich Schaffer said the town planned to build a new animal shelter in 2016, but the project will now be phased in over two years. The roughly 30-year-old shelter in West Babylon is "outdated," Schaffer said, and officials want to open a new one on town property in North Amityville.
For the town's landfill employees, module trailers are "run-down and in poor condition," Schaffer said. But a new building for the employees will be delayed until 2017 because of the cap.
Some towns have higher tax caps because of exceptions that account for high litigation and pension costs. For example, the Town of Huntington has a 1.3 percent cap and Hempstead's is at 1.26 percent. East Hampton has a 2.15 percent cap, but officials there say they will raise next year's levy by only 1.8 percent. And municipalities can vote to override the tax cap with a two-thirds majority.
As some town officials work to avoid layoffs or service cuts, others try to staff up critical departments. In North Hempstead, Bosworth said she wants to add staff to the town's building department, which had been criticized before she took office in 2014 for slow customer service. However, she said she doesn't know whether she will include the 3 percent raise for 62 nonunion upper managers and other employees, totaling more than $145,000, that had been allocated in the 2015 budget.
Concern for future years
Bosworth and other town officials say they can save by not filling vacancies. Towns have smaller workforces than in past years, dating to the recession. Huntington officials say they have about 800 employees, down from about 1,200 in 2008.
In Hempstead, Comptroller Kevin Conroy has credited a retirement incentive program for savings in the 2014 budget. Russell in Southold said the town may soon need to roll out an incentive program of its own.
"We're stressing; we're wearing thin without the needed help," said Russell, who also wants to add to the town's highway department and code enforcement staff.
Southold officials delayed plans for replacing an aging facility in the town's highway yard and to replace Town Hall and the police station. However, officials are likely to build a new justice court next year, Russell said.
In North Hempstead, officials are re-evaluating conferences for employees, special training, and "all the supplies," Khatchadourian said. The town started a purchasing freeze this month. Even office furniture is up for grabs -- employees are messaging each other pictures of available pieces for offices.
And while officials say they were shocked by the drop in the tax cap when it was announced in July -- but promise to stay under it -- experts and town officials wonder how much longer they can.
"My concern is the long-term impact on the cap," said Russell, who said he plans to stay under the cap this year. "I can't speak for the future. It's getting harder and harder each year."
Tax cap
The baseline tax cap for municipalities with a Jan. 1 fiscal year in New York State has declined since it was imposed in 2012:
2012: 2 percent
2013: 2 percent
2014: 1.66 percent
2015: 1.56 percent
2016: 0.73 percent
Delayed projects
Officials say they are delaying key infrastructure projects and public safety initiatives:
In Southold: Supervisor Scott Russell doubts he can add up to five new officers to the town's police force.
In Huntington: A plan for a new parking district, including a garage in the downtown area, is on hold, as are improvements to parks.
In Babylon: A new animal shelter to replace an outdated one in West Babylon will take two years to finish and fund, instead of one.
Exclusions
Some municipalities can have higher caps, for a limited number of exclusions.
They include costs related to unusually large jumps in pension contribution costs and judgments from tort litigation. Towns that stayed under the tax cap in the past year are afforded higher limits the following year. Growth in the tax base or additional payment-in-lieu-of-taxes (PILOT) payments can also affect a municipality's cap.
For example, East Hampton has a 2.15 percent cap in 2015.
Scott Eidler covers Nassau County government and politics for Newsday. Scott has worked at Newsday since 2012 and previously covered municipal government and education.
