Government

Tax hike for 2010 explained

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“I’ve heard only positive things from the community,” Councilman Peter Reich said of the town’s proposed 2010 budget.


So it seemed — the community aired no complaints during the November 4 public hearing on the preliminary budget, which carries a $6.5 million tax levy, 4.4 percent higher than in 2009. The board is expected to formally adopt the budget at its meeting this Friday, November 13.


Recent supervisor candidate Paul Shepherd was the only community member attending the hearing and asked the board “to explain to me the crux of the 4.4 percent increase.”


“Lost revenues, not increased expenses” was the short answer from Mr. Reich.


Those losses include mortgage tax revenues, lower by almost a half million dollars since two or three years ago, Councilman Ed Brown added. In 2007, those revenues were about $724,000; the 2010 projection is for only $275,000.


The only new expenses were mandated, Mr. Reich said, including the MTA tax. Pensions contributions are also up, by over a quarter million dollars, Town Supervisor Jim Dougherty added. “The town had to offset” those costs in the budget, “which we successfully did,” he said.


The supervisor noted that three large Island property transactions closed recently and brought in two-percent tax revenues for the Community Preservation Fund, but because they were cash purchases, “not a penny of mortgage tax.”


“What stunned me was how much the interest income had fallen,” Councilman Glenn Waddington commented. Interest projected for the town’s various funds have decreased from a high of over $440,000 in 2007 to under $67,000 projected for 2010. (See the table for more revenue changes.)


Mr. Waddington complimented town department heads, who submitted budgets that were mostly lower than those submitted in 2009.


They did so voluntarily in recognition of the town’s financial crunch, board member Chris Lewis noted. Although it was not discussed at the hearing, one department is set to receive much less than it originally requested. The Deer and Tick Committee had requested just under $200,000 for the 4-poster program; the preliminary budget allots $80,0000.


In summarizing the budget discussion, Mr. Shepherd said, “So economically sensitive revenues are the issue.”


Yes, but the town “can’t be complacent and say ‘things have got to turn around,’” Mr. Waddington responded. “We haven’t talked about layoffs” like some other East End towns. “Maybe we have to look at attrition” and not filling positions, the councilman said, adding that because department heads were so diligent, “I don’t feel that we are at that point.”


Should the town adopt the preliminary budget, homeowners may expect an increase in their town tax bills. The 2010 budget carries a tax rate estimated at $2.09 per $1,000 of assessed property, compared to $1.81 per $1,000 of property in 2009. That’s a tax rate increase of over 13 percent. 


According to the Assessor’s Office, property values for the coming tax year have begun to reflect a declining real estate market. The total assessed value used by the town in determining the tax rate is $3,291,901,108 for 2010, compared to $3,299,595,038 in 2009, a 0.24 percent decrease.