Despite a budget deficit of nearly $2 million, Riverhead Supervisor Yvette Aguiar’s first town budget proposal will fall under the state’s 2% tax levy cap, and it will reduce spending in the three townwide districts that all town taxpayers pay into, she said.
The $59,070,100 proposed budget, released Wednesday, cuts townwide spending by 1.14%. It also increases the townwide tax levy by 2.6% and it increases the townwide tax rate by 3.45%, from $56.068 per $1,000 of assessed value to $58 per $1,000.
The townwide funds are the general fund, highway and street lighting budget.
For a property owner with land assessed at $50,000 — which equates to about a $406,000 market rate — that would amount to an additional $96.60 per year in town property tax.
The tax levy falls under the state’s 2% tax cap due to a number of exemptions in the cap law, according to officials.
Unlike other towns, Riverhead also has a number of special town districts that only certain taxpayers fall under, like water districts, sewer districts, a garbage district, and others.
If all of those were added up, the town budget is $99,589,200, and is a decrease from the current budget of $100,390,400.
The Town Board will hold a special meeting at 10 a.m. Thursday for the Town Clerk to formally present the supervisor’s 2021 budget to the Town Board.
By law, the supervisor is required to present a “tentative budget” to the Town Clerk by the end of September, and the Town Board then must hold a public hearing and can then make changes if it wants.
The final budget must be adopted by Nov. 20.
Ms. Aguiar said that the loss of revenue attributed to COVID-19 closures — from the state, the county and sales tax revenue — left the town with a $1.9 million deficit.
An additional contribution of $872,400 to the retirement pension also hurt town finances, she said.
“Immediately action was necessary to address the impending budget shortfall,” she said in her budget address.
The supervisor said that department heads were asked to cut spending and this resulted in an overall reduction of $684,200 townwide.
“This was accomplished through the elimination of nonessential purchases, insourcing where possible and working cooperatively to avoid any negative impact or the elimination of services to our residents,” she said.
The supervisor also said two police unions — the Police Benevolent Association and the Superior Officers’ Association — agreed to extend their contract by two years, reducing the town payment by $645,000 for 2021 budget.
Town taxes generally amount to about 30 percent of the overall property tax bill, with school taxes being the highest amount.