Villages wary of lower state tax cap

For the third consecutive year it appears that the state’s mandated baseline tax cap for municipalities will decline, which, according to officials in a few Five Towns villages will result in some belt tightening come budget time next year.
The anticipated tax cap for 2016 is 0.73 percent. This year it is 1.56 percent and in 2014 it was 1.66 percent. In 2013 and in 2012, the year the state instituted the cap it was 2 percent.
Implemented as a way of bringing skyrocketing property taxes under control, the tax cap is commonly known as the “2 percent” tax cap, but that is misleading. Two percent, or the rate of inflation, whichever is lower, is the “allowable growth factor,” but is just one part of a complex formula that sets the actual cap for each taxing entity. The limit is on the tax levy, the total amount of money collected through property taxes.
Village of Cedarhurst Administrator Sale Evola said that the lower tax cap is a “bigger problem and makes it very difficult for the village stay within the cap.” “With an increase of the tax levy we can’t raise taxes more than $12,000,” Evola said. “My understanding is that a large percentage of municipalities pierce the tax cap, but we don’t what we are doing right now.”
Cedarhurst’s fiscal year begins on June 1, and Evola said that discussion with the village board will be ongoing, but he did say, “the village doesn’t cut services.” The current budget is $5.54 million.

Services most likely will not be reduced in Atlantic Beach either, said Mayor George Pappas, but it is possible that projects such as road repair could be affected. “We are on strong financial ground, I don’t foresee it being a problem [maintaining daily services], but it could prevent some capital projects to be done, but we should be able to operate as usual.”
Pappas said that the village never opted into the state pension system and is not affected by the increases in New York’s employee retirement system. Atlantic Beach has a private retirement system for its 12 full-time employees. Its current budget is $2.963 million,
In a village where taxes have not been raised for seven years, Hewlett Harbor Mayor Mark Weiss is looking to continue that stability, while also preserving the services his residents have come to expect, such as road repair and a private security force.
“What we do is adjust he tax levy up or down,” Weiss said. The village bases its property assessment to the county’s assessment, he added. “If the assessment is up we lower the tax levy, if the assessment is down we increase the levy, so the tax number remains the same. Our goal is to maintain our village taxes as low as possible not to burden our residents.” The village budget is $1.517 million.
By applying effective cost controls and managing expenses, Woodsburgh Mayor Lee Israel said, “puts us in a balanced or slightly positive financial position. “We have not had to raise taxes my previous term and we don’t expect the need to do so this term either,” he said. “Baring any unforeseen circumstances we expect no decrease in services and no additional need to increase revenue via a tax increase.”