Southold took the first step needed to pierce the property tax cap levy for the 2017 fiscal year, an action that will be required for the first time since the tax levy limit established by the State Legislature was implemented in 2012.
The New York State comptroller has set the tax levy limitation for fiscal year 2017 at .68 percent.
Supervisor Scott Russell is working to finalize his 2017 tentative budget, which must be filed by Sept. 30, according to state law. He has not disclosed specifics of the budget plan, but has said it is not feasible to expect the budget can be brought in within the tax levy limitation set by the state.
At yesterday morning’s work session, the supervisor told board members that the town’s health insurance premium increase alone will require the town to pierce the tax levy limitation.
Empire, Southold’s health insurance carrier, will have a 9-percent premium increase, Russell said. With a $5 million tab for the 2016 premium, the cost of health insurance will go up about $450,000.
“That alone will pierce the cap,” Russell said.
The 2016 town-wide tax levy was $29.73 million to fund $52.1 million in town-wide spending, including the highway fund. The overall spending plan for the current fiscal year, including all special districts, was just under $70 million, with a tax levy, including special district taxes, of $41.5 million.
The state law establishing the cap requires the town to pass a local law authorizing the action. The local law is subject to a public hearing and must be passed by 60 percent of the board — four of Southold’s six board members.
Last night, with Russell absent, the board voted unanimously to set a public hearing on the proposed local law for Oct. 18 at 7:31 p.m.
“The Town of Southold has made significant efforts to reduce spending in an effort to avoid piercing the tax levy limit,” the resolution adopted last night states, “however, in order to account for the increase in costs to provide town services and and town operations for 2017, while at the same time maintaining the town’s high credit rating and general fund reserves, will likely require adoption of a budget in excess of the tax levy limit.”