Riverhead Town Supervisor Sean Walter unveiled a tentative 2017 spending plan Thursday that includes a 4.12 percent increase to next year’s tax levy.
A resident whose home is assessed at $350,000 would end up paying about $2,730 in town property taxes next fiscal year — a $110 increase over the current year, according to Mr. Walter’s proposal.
The supervisor’s proposed budget — which, if approved, will pierce the state-mandated 1.4 percent tax levy cap — includes $54.4 million in spending. That’s an increase of 1.95 percent.
The town can only raise the tax levy by about $475,000 next year in order to stay within the tax cap limit, Mr. Walter said. He added that the budget would also have to be reduced by $1.3 million to stay within the cap.
By law, the Town Board only needs three votes to override the tax levy cap, although school districts need 60 percent approval from voters to do so.
“I’m a few huge supporter of the tax cap, but it’s completely unsustainable the way it’s working at this point,” Mr. Walter said at Thursday’s Town Board work session. “You cannot dictate to a town that they have to stay at less than 2 percent or the cost of living when every other thing is going up, including unfunded mandates.”
Mr. Walter said the cost of employee medical insurance was almost enough to pierce the cap on its own.
“There’s no one-shot revenues in here,” he said, adding that the $750,700 in revenue the town had previously expected from a solar energy lease at the Enterprise Park at Calverton is no longer anticipated.
The supervisor said he’s hopeful that a deal to sell more than 600 acres at EPCAL to Suffolk Industrial Development for about $45 million will be completed early next year. He said the sale includes an immediate $1 million down-payment to the town.
Town Assessor Laverne Tennenberg said the EPCAL deal would also add about $1.2 million to property taxes, with nearly $300,000 of that total going to the town. She said 61 percent of the town’s property tax bill goes to school districts, while about 30 percent goes to the town.
The tentative spending plan for expenses in general, highway and street lighting funds also carries a 4.19 percent hike to the tax rate, Mr. Walter said.
In recent years, the town has been able to reduce tax hikes by using its fund balance, mostly through land sales or contract extensions on potential land sales at EPCAL.
However, the town now has just $2 million in general fund surplus, according to town finance administrator Bill Rothaar. None of it is being applied to the budget to lower taxes, he added.
While those figures apply to the three districts paid for by all taxpayers, Riverhead Town’s overall budget amounts to $93.9 million in spending when special districts like the water district, sewer district, garbage district, parking district, Business Improvement District and others are included.
That amounts to a 1.6 percent spending increase overall.
“People can criticize all they want,” Mr. Walter said. “This is a very lean budget.”
Councilman Tim Hubbard said he met with Mr. Rothaar to go over the proposed budget line-by-line. Although he said he went in with the attitude of “I know where you’re hiding the money, Bill,” he exited those meetings convinced it’s not there.
“There’s no fat in this budget,” he said.
The Town Board has scheduled public hearings to discuss the budget Tuesday, Oct.18, at 7 p.m. and Tuesday, Nov. 1, at 2 p.m. The deadline to adopt the budget is Nov. 20.