Islip Town residents could see a nearly 6% property tax hike next year as the town feels the economic effects of the coronavirus pandemic.
Faced with a choice of cutting programs or exceeding the state's 1.56% cap on property tax levy increases, Islip officials chose the latter to avoid laying off staff and closing town facilities, Supervisor Angie Carpenter said.
The town's proposed $248.1 million budget includes $3.6 million in new spending, an increase of 1.47%. But officials said they had to grapple with more than $6 million in revenue losses that they blamed on the virus.
"This was the worst," Carpenter said in an interview Monday. "This was the most difficult [budget], especially because I know so many people are hurting out there. We just wanted to do right by the taxpayers."
The town board will hold a public hearing on the budget at 10:30 a.m. on Thursday in Town Hall. Residents can participate virtually on the town website. The board plans to vote on the budget immediately after the hearing, Carpenter said.
Taxes on the average home assessed at $400,000 would go up 5.83% on the town portion of the tax bill if the budget is approved, Islip officials said. That translates to a $33.51 annual increase.
Spending in three major town funds, including the general fund, highways and services outside villages, would decrease slightly, from $148.2 million this year to $147.6 million next year, or 0.44%, officials said.
Islip officials also expect to pay more for mandated expenses, such as pensions and employee health care. Town officials budgeted no raises but are negotiating a new contract with unionized employees, Carpenter said.
The statewide pause resulted in substantial town revenue losses, including $2 million in building permit and planning department fees, $1.5 million in code violation fines, $750,000 from lower interest rates and an expected $750,000 drop in state aid, Islip officials said.
"Our revenues were not in line" with spending increases, Carpenter said. "Most of the reasons were totally not in our control, such as COVID."
But officials opted not to impose layoffs or close programs and facilities such as parks and beaches, Carpenter said.
"With whatever is going on in our economy, and people out of work, we really don’t want to continue that with laying people off," she said. "I do believe that in the interest of everyone involved, no one wants to deal with program losses. … They’ve been through enough."
Carpenter said it was "very tempting to kick the can down the road" by increasing spending on programs and services, but she did not want credit rating agencies to lower the town's AAA bond rating. That rating allowed the town this year to refinance $6 million in outstanding debt at a 0.29% interest rate, about one-third of the previous rate.