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Supervisor: Southold Town will have to pierce tax cap

07/28/2016 9:00 AM |

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Southold Town Supervisor Scott Russell said the town will be forced to pierce the state tax cap next year for the first time since the legislation was implemented in 2012, stating the 0.68 percent increase set by the state for 2017 is too low to cover basic costs. 

“I do not see any scenario where I can comply with the tax cap in the budget I submit to the Town Board,” he said. “[Even] if all things stay equal, I cannot comply with the tax cap.”

Mr. Russell said necessary road repairs and improvements make it even harder for the town to stay under the cap, which limits the total amount of money the town can collect from taxpayers.

“The complaints we’re getting because of two terrible winters that have really wreaked havoc on our roads need to be addressed, and they need to be addressed with a substantial amount of money,” he said.

The tax cap legislation was passed in 2011, became implemented in 2012 and has been associated with a 2 percent tax increase limit. But in each subsequent year of the tax cap, the allowable increase has dropped. The 2017 cap marks the lowest increase the state has allowed for Southold Town so far.

If the town chooses to pierce the cap, the budget must be approved by a supermajority of the Town Board. Mr. Russell said he considered floating a bond for the road repairs, but didn’t feel it was the best choice for the town’s finances.

Even if the town does pierce the cap it will still have a tough decision ahead, as a $2 million investment in roads would raise the tax rate by nearly 7 percent. The town still receives more than $400,000 in state funding for basic road repairs, but Mr. Russell said that’s “just not sufficient anymore.”

In 2015, the town spent more than $1 million on road repairs, while still leaving many town roads with potholes and other problems. Even a relatively mild winter did little to make headway on the road repairs across town.

Mr. Russell said piercing the tax cap wouldn’t affect the town’s credit ratings or its fund balance, which he has so far declined to use to pay for road repairs.

In fact, he said, “what Wall Street likes to see is town boards that are willing to raise taxes.”

Councilman William Ruland said he was “more than open-minded to consider anything that [Mr. Russell] brings forward.”

“Many people have suggested a strong desire to improve the roads,” he said.

Board member James Dinizio agreed, adding: “At some point in time, you have to bite the bullet.”

When asked what cuts would be needed in order to keep the budget under the tax cap for 2017, Town Board members agreed that employees would be first on the chopping block.

“You cut out people,” said board member Louisa Evans. “That’s the only way you could do it.”

For now, however, that option seems off the table.

Photo caption: Southold Town Supervisor Scott Russell at Tuesday’s Southold Town Board meeting. (Credit: Paul Squire)

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