Tax hike looming in Valley Stream

A correction of the tax rolls to more accurately reflect commercial property values could cause a larger than normal tax increase for village homeowners when the 2012-13 budget takes effect.

Valley Stream officials unveiled the tentative $34.8 million budget, which would raise spending by about $699,000, on Monday night. The plan would comply with the new tax-cap law. The village’s allowable tax levy increase is 2.6 percent — the 2 percent tax cap plus an allowance for increasing pension costs. The proposed budget carries a levy increase of 2.59 percent.

For years, the village has been paying back hundreds of thousands of dollars in tax refunds for over-assessed commercial property. The problem peaked in the 2010-11 fiscal year, when Valley Stream had to pay back about $2 million.

Village Treasurer Michael Fox said that the village is looking to curb these refunds, and has hired a consulting firm to review all commercial property assessments in the village. Many assessments will be lower when the final tax rolls are determined, which will shift some of the property tax burden to homeowners.

While he does not yet know the tax impact on the average homeowner, Fox said it will be significant. “They will certainly notice it,” he said. “Unfortunately, it’s just a necessary evil to correct our rolls.”

He explained that the village is trying to be proactive by resolving assessment discrepancies before property owners file challenges. Valley Stream will budget $900,000 next year for outstanding cases. Some of that money is already earmarked for the second of three payments of an $800,000 refund due to Long Island American Water.

Eventually, Fox said, fewer refunds will mean the village will no longer have to budget nearly $1 million each year to settle assessment challenges. “Our plan is that $900,000 is going to gradually reduce down to almost nothing,” he said. “It’s going to be a process that’s going to take two to three budget cycles before it finally comes to fruition.”

Fox said he was charged with developing a budget plan that met the tax-cap requirement. Unlike some other villages in Nassau County, Valley Stream officials did not vote to override the cap, and, Fox said, it drove many of their decisions in planning the 2012-13 budget. “That was the biggest and almost only factor that came into play,” he said.

What made the budget planning even tougher, he said, was the fact that payroll will rise about 5 percent next year. That includes 4 percent raises across the board plus various longevity-based increases. “We had negotiated that contract three years ago,” Fox said, “before we anticipated the cap.”

He added that the employee contract expires in 2013, and that employee salaries and benefits account for 62 percent of the budget.

Deputy Mayor Vincent Grasso noted that there will be reductions in overtime and summer help, and department supervisors were asked to submit budget requests that cut spending in their area by 10 percent. “We’re asking every department to tighten their belts and try to do more with less,” Grasso said. “We have to keep costs lower.”

Budget odds and ends

The preliminary budget maintains all village services and even enhances programs. Fox pointed to the new electronic waste recycling program and the soon-to-open dog park.

Village officials expect recreation fees to increase next year partly because of the opening of the dog park. They are also looking to raise money through the creation of a commercial vehicle lot, and by selling a small municipal parking lot inthe village’s downtown off of Hawthorne Avenue.

Next year’s capital budget includes money for road repairs, the acquisition of 195 Rockaway Ave. to serve as a Village Hall annex and the purchase of new “bodies” for several sanitation trucks.

The village board will hold its annual budget hearing on Monday, April 9, at 7:30 p.m., at Village Hall. Members of the public can ask questions about the proposed spending plan. The new budget will take effect on June 1.