Taxes in the Southampton Town portion of the Riverhead School District will soon increase a whopping 22 percent. At the same time, the tax rate in the Riverhead Town portion of the district is expected to drop very slightly in the tax bills going out next week.
The 22 percent increase would equate to an additional $1,125 per year for owners of property valued at $500,000 and about $675 more for someone with property valued at $300,000.
The school tax rate in Riverhead Town will be less than 1 percent lower, the equivalent of a $42 reduction for those with property assessed at $500,000 market value and $25 for owners of property assessed at a market value of $300,000.
This marks the third consecutive year that school taxes have skyrocketed in the working class communities of Flanders, Riverside, Northampton and Red Creek, which are part of the Riverhead School District even though they are in Southampton Town.
“I don’t think it’s fair,” said Flanders resident Carl Iacone. “We’re not the richest part of town and yet they clobber us every year. Just wait until people see this. They’re going to go crazy.”
Southampton Town assessor Ed Deyermond said the big jump in the Southampton portion of the district is due in part to fluctuations in the state equalization rate, a formula used to divvy up taxes in districts like Riverhead that extend to more than one town. He said it’s also the result of a decrease of about 9 percent in the total assessed value of all property in the district’s Southampton portion.
“We did a sales analysis of property in [Southampton] and that resulted in a reduced assessment in the Riverhead school district,” Mr. Deyermond said.
A lower districtwide assessed value translates to a higher property tax rate, because there will be less of a tax base to handle the tax burden, although residents whose individual property assessments were lowered will not end up paying 22 percent more over what they paid this year, according to Southampton tax receiver Theresa Kiernan.
At the time of the school budget vote in May, tax rate information was unavailable, but officials said at the time that the overall amount of taxes collected districtwide — known as the tax levy — would increase by just 2.4 percent.
The Riverhead School District tax rate in Southampton Town rose by 14.6 percent last year and by 14.5 percent two years ago.
In those same two years, the rate increases for Riverhead Town taxpayers were 1.16 percent and 2.67 percent.
“I guess we’re all going to have to move,” said Chrissy Prete, a Flanders resident and former Riverhead school board member. She said a 22 percent increase will mean almost $900 more for her and will leave her with a tax bill of almost $6,500 on a three-bedroom, one-bath house on a quarter acre of property.
Riverhead Assessor Laverne Tennenberg said the equalization rate change also resulted in the Riverhead Town portion of the district getting over $20 million more in tax revenue from special franchises like Cablevision and Verizon that have utilities within a public right of way, which helped lower taxes in that town.
The Riverhead school district also includes a very small section of Brookhaven Town, where the tax rate is also going down, officials said.
Mr. Deyermond said Southampton Town will likely apply to the state for a special equalization rate to address the tax shift problem.
The town received a temporary special equalization rate for two years in 2003 and 2004, which was meant to stabilize taxes until the town reassessed all of its property, which it has subsequently done.
Mr. Deyermond said that because town officials anticipated earlier this year that school taxes would not have a major shift to the Southampton side, they decided not to seek the special equalization rate, for which applications were due by June.
Ms. Prete, who lobbied for the special rate in 2003, said the district needs a permanent special equalization rate.
“Nobody is going to buy a $200,000 house that pays $6,000 in taxes,” Ms. Prete said. “If they don’t do something quickly to reduce the taxes this year, I don’t know what’s going to happen here. They are ruining this area of the town. I’m really scared now.”
Despite the big shift in taxes over to the Southampton side, people in the Riverhead Town portion of the district are still paying more on property of the same value.
For instance, given two properties in the school district with market values of $500,000 — one in Riverhead and one in Southampton — the Riverhead property owner would pay school taxes of $7,187 and the Southampton owner would pay $6,176. That’s if you use the state-assigned equalization rate, which is based on an assessment rate of 15.18 percent of market value in Riverhead, where a townwide reassessment hasn’t occurred since 1980. Southampton, by contrast, completed a townwide reassessment a few years ago, and assesses properties at 100 percent of their market value.