By Jano Tantongco
For the first time since the tax cap was implemented in 2012, the Huntington Town Board is considering piercing its state-mandated limit for the upcoming tax year. The 0.68-percent limit for the 2017 tax year is the tightest tax constraint the town has ever faced.
In a unanimous decision, the board voted Tuesday to schedule a public hearing for next month to discuss authorizing the board to override the cap, if it chooses to do so.
In order to pierce the cap, 60 percent of the Huntington Town Board would need to vote in favor, according to state law.
Town officials estimate that, if the cap is pierced, taxes would increase $18-$30 per household.
After Tuesday’s board meeting, Huntington Supervisor Frank Petrone said the need to pierce the cap is heavily based on state-mandated increases to health insurance for municipal employees and retirees. These costs amount to nearly 300 percent of the levy limit, according to the resolution scheduling next month’s public hearing.
“It’s not even salaries that you’re concerned with anymore, it’s benefits,” Petrone said. “The state put no caps on that.”
Previously, residents were eligible for tax rebates from the state if their local municipality stays within the tax cap. However, the property tax freeze was a two-year program that concludes with the 2016 fiscal year and, therefore, residents would not receive the rebate in 2017, regardless of whether or not Huntington pierces its cap.
So, Petrone asked: “What are my residents saving? What are they gaining?”
He continued, “You’re talking about a cap that, if it is pierced, it’s not going to be a drastic effect.”
Petrone plans to prepare two budgets for the Huntington Town Board to consider, one that pierces the cap, and one that does not. The budget must be presented by Sept. 30.
If the cap override is struck down, Petrone said the town would have to cut back on expenses, including through potential layoffs of town employees and elimination of programs and services.
Petrone said, “Everything is in jeopardy… then you have to start picking and choosing.”
The state’s tax cap, which has also been set at 0.68 percent, is adjusted each year based several factors, including inflation and consumer price index. From there, a municipality calculates its own tax levy limit through a similar process involving several factors.
Huntington’s tax cap in 2016 was 1.36 percent; and, in 2015, it was 2.98 percent. The actual levy limit that municipalities are assigned may exceed 2 percent with certain exclusions, and if there is available carryover from the previous year.
“If you raise taxes less than the tax cap any given year, that difference carries over next year as a credit,” said A.J. Carter, spokesman for the town. “When it comes in at 0.68 percent for next year, it’s 0.68 percent.”
The public hearing is slated for 7 p.m., Sept. 27, at Huntington Town Hall.