Although state law prohibits the town and other local taxing authorities from raising the property tax levy more than 2 percent in any one year, Southold Town could see a tax rate hike approaching 3 percent in 2013, said Supervisor Scott Russell, who must submit a new spending plan outline by the end of this month.
Several economic factors, all unfavorable, are the cause, Mr. Russell said.
Town employee pension payments alone will rise $277,000 over this year’s level, he said.
That will add a full percentage point to the tax rate hike. Pension costs do not count toward the 2 percent limit.
While that expense continues to rise, the town’s mortgage tax revenue continues to be far below past levels. When real estate sales are booming, that funding can approach $7 million a year and even in an average year the town can expect to take in between $4 million and $5 million, Mr. Russell said.
Next year he expects the town will received under $1 million.
“It should come as no surprise to anyone that the economic conditions have not improved and the outlook remains bleak,” Mr. Russell said.
This year’s town budget raised property taxes 2.2 percent.
Read the complete story in the Sept. 13 issue of The Suffolk Times.