The Southampton Town Board is considering legislation that would require using at least 75 percent of unanticipated surpluses to fund town projects in an effort to reduce debt.
Supervisor Jay Schneiderman and Comptroller Leonard Marchese said the proposed law would allow the town board to borrow less money and pay less in interest.
“Why pay interest when you have the money in the bank?” Schneiderman said at Thursday’s town board meeting. “The belief is this will lead to tax stabilization or potentially lower property taxes in the future.”
The law would apply to surpluses that are not planned for in the budgeting process and that come from events such as an unexpected rise in town revenue or grant awards. The money would be used to fund only projects within the same fund. For example, a surplus in the highway fund could be used only for projects in the highway fund.
The rest of the surpluses typically goes into “rainy day” funds.
Board members said they will reconsider the legislation once it is updated with a few wording changes and once the comptroller’s office has completed a report on this year’s surplus.
“We need more numbers so we get an idea” of how this law would work, Councilwoman Christine Scalera said, noting she is concerned the proposal could increase town spending. “In an attempt to address a legitimate concern, I don’t want to create unintended consequences.”
Marchese said he estimates there will be about $3 million more in surpluses than the board budgeted for this year.