ISLIP TOWN

Islip could pierce tax cap with 2021 budget

Officials cite COVID-19 costs, reduced federal funding as reason

Posted

Islip Town officials are considering piercing the tax cap with the 2021 annual town budget.

Town officials approved a resolution Tuesday, Oct. 20, which authorized the town clerk to host a public hearing to consider adopting a budget which would require a levy in excess of the municipal limit, meaning it would go above the 2 percent cap established by New York State. This year, Islip’s tax cap was 1.5 percent.

Town spokesperson Caroline Smith said Islip will propose a budget with a tentative increase of $41.83 annually

for homeowners, which will be directed to the general fund, highway fund, and the town, excluding villages. A detailed budget will be made available at a Nov. 5 town board meeting.

Reduced federal and state aid as well as general pandemic-related costs are part of what prompted the town to consider exceeding the tax cap.
The spokesperson said the town has “made every effort to be responsible not to decimate services and lay off employees as some other municipalities have been forced to do.”

The town has not received any direct funding from Suffolk County or aid through the Coronavirus Aid, Relief and Economic Security Act, Smith said, unlike neighboring Town of Hempstead, which received direct CARES Act funding.

The $2.2 trillion economic stimulus CARES Act was signed into law by President Donald Trump March 27, 2020, in response to the economic difficulty presented by the COVID-19 pandemic.

In late April, congressman Lee Zeldin (R-Shirley) announced Suffolk received $257 million in federal funding through the bill to offset the financial impacts of the pandemic on local municipalities.

Despite requests for assistance, Smith said, county officials “did not share the federal funding with local towns or villages” and it was directed entirely to the county. Requests were made to the governor to set the 2 percent tax cap aside due to the pandemic, she said.

“While we understand that times are hard for many, and that any increase may present a burden, please know that this decision was not reached lightly,” she wrote. “In order to avoid layoffs, or cutting services that our residents expect and deserve, the reality of recent events and dramatic funding cuts and revenue losses, an increase is necessary.”
The cost increases, she said, are tied to the pandemic, cleanup costs due to Hurricane Isaias, a projected 20 percent cut in state aid for highway funding and aid to municipalities, and projected spikes in state health care and pension costs.

According to the New York State Department of State, the tax cap law establishes a limit on the annual growth of property taxes levied by local governments and school districts to 2 percent or the rate of inflation, whichever is less. A public hearing is mandatory if the town aims to exceed the tax cap.

Smith noted that despite the challenges, Islip Town has maintained its AAA credit rating, which allows the town to continue infrastructure improvements to roadways, parks, beaches and more at a low borrowing rate.

In a recent report, New York State comptroller Thomas DiNapoli noted that Suffolk was one of four state municipalities that was in “significant financial stress” in 2019, prior to the pandemic.

The New York State 2021 Tax Base Growth Factor helps cities and towns calculate their annual budget and tax cap. This year, Islip Town’s tax base growth factor was 1.0038, lower than last year’s 1.0078 across Suffolk County.

Smith said despite pandemic-related challenges, Islip’s Long Island MacArthur Airport “continues operations, and remains self-sufficient, using no taxpayer dollars.” The airport received direct CARES Act funding which was directed to pandemic-related costs.

“We will continue our commitment to sound and appropriate economic development, all the time preserving a good quality of life for all our residents,” she said.

Comments

No comments on this story | Please log in to comment by clicking here
Please log in or register to add your comment