Riverhead Town’s tentative budget for 2017 is a few weeks away from being released, but the Town Board is already taking steps to possibly pierce New York State’s budget cap.
The town will have a tax levy cap of 1.4 percent for its 2017 budget, which gets adopted in the fall.
Supervisor Sean Walter said that as of now, the budget he’s developing will increase the tax levy by about 4.9 percent.
The town hasn’t made any official decision to pierce the cap, but it will need to hold a public hearing to do so, which must have advanced notice. At its work session Thursday, the board discussed scheduling a hearing notice.
The town did pierce the cap last year.
“This is just preparing,” Councilman John Dunleavy said. “I think it’s a good idea, instead of waiting until we get the budget.”
Having the public hearing doesn’t mean the town has to pierce the cap, he added.
Mr. Walter said if the $45 million sale of about 600 acres at the Enterprise Park at Calverton is finalized, the town won’t need to pierce the cap.
But Mr. Walter said that’s “a big if.”
The town by law must adopt a final budget by Nov. 20.
Mr. Walter said he doesn’t think the town should anticipate having that revenue.
“Right now, we’re coming in at about 4.9 percent,” he said. “We’ve done everything we possibly can. I can’t physically go any lower than 4.9 percent.”
It would take about $1.2 million in cuts to meet the tax cap, he said.
“Those are cuts in services,” Mr. Dunleavy said.
“I’ll reserve my comments until I see the budget,” Councilman Jim Wooten said.
The town had used surplus funds, mostly from past land sales at EPCAL, to offset tax increases for close to a decade, but that money is drying up.
“We can’t live on one-shot revenues,” Councilwoman Jodi Giglio said.
A Town Board can vote to override the tax cap with a simple 3-2 (60 percent) majority vote.
A school district, which accounts for about 60 to 70 percent of the tax bill, can only override the tax cap if more than 60 percent of voters support the budget that pierces the cap.
In the event that a town successfully overrides the tax levy limit, the base for the following year’s tax levy limit calculation is the amount that was levied in the prior year inclusive of the override amount, less any amounts to be subtracted as set forth in the law, according to the state.