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East Hampton will bear the Brunt of Taxes in Sag Harbor School District

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Both Southampton and East Hampton town finalized their tentative budgets last week, with the maximum increase allowed by law for Southampton and a considerable increase for East Hampton residents.
Adding a further burden, residents on the East Hampton side of the Sag Harbor School District will see an increase in their school tax rate this year, while those on the Southampton side of town will see a rate decrease.
In a report on the Sag Harbor School’s website earlier this month, business manager Len Bernard, outlined that the expected increase for Sag Harbor residents in East Hampton will be 17 percent while district residents on the Southampton side will see a decrease of 4.5 percent. The total tax levy for the school district is expected to increase by $471,762 from $24,650,798 in the 2007-2008 school year to $25,122,560 for 2008-2009. The total increase is 1.92 percent and will be paid solely by the residents on the East Hampton side of the village. Bernard explains that’s because of the recently revised equalization rates set by New York State that found a higher market value for homes in East Hampton and a lower rate for Southampton town homes.
“Homes in East Hampton have not had new equalization rates for probably 50 years,” Bernard said on Tuesday, “I remember back to the mid-90’s where the assessors said we need to reassess there.”
Bernard said that last year, Southampton Town residents paid 89.55 percent of Sag Harbor School districts’ property tax levy while East Hampton residents paid 10.45 percent. The changing market values caused primarily by the changing equalization rates, will now require Southampton residents to pay 87.82 percent of the tax levy and East Hampton to pay 12.18 percent in the upcoming tax bill. Southampton property is assessed at 100 percent of market value, whereas East Hampton is only assessed at .61 of a percent.
Bernard, a former East Hampton Town councilman and budget advisor, said, “The continued downward movement in the East Hampton Town equalization rate and Southampton’s work to assess at 100 percent of market value has created this situation.”
To arrive at the tax rate for Southampton residents in the district, Bernard explains that the assessed value of the property is divided by the equalization rate.
“In Southampton, there is a $1,000 total assessment, equal to 100 percent,” Bernard said on Tuesday. That means that Southampton Town residents in the district are assessed on the full value of their properties.
The new assessed rate for Southampton Town was set over the summer, up from 89.7 percent to 100 percent for town residents in the district.
“In East Hampton, on the other hand, the assessment went up a little bit, but their equalization rate went down. For example, if there is $1,000 of assessed value in East Hampton, it would translate into $163,000 of market value — the equalization rate would translate into less than one percent.”
Bernard noted that for East Hampton, the assessment number can’t be used to determine the tax rate. Instead, the equalization rate must be used to arrive at market value. He explained that if the assessment rate goes up while the equalization rate goes down, market value becomes higher.
Last year, Southampton’s equalization rate was 87.5 percent and East Hampton’s rate was .67 of a percent, according to Bernard. The district predicted last winter that Southampton would see a 2.30 percent decrease in 2009-10 while East Hampton would see a 2.23 percent decrease — but the new equalization rates that were recently adopted by both towns changed those predictions.
“When I did the budget presentation [earlier this year] I based the projection of tax rates on the equalization rates then,” Bernard explained. “Then in October I explained at the monthly key communicators meeting that the numbers had changed.”
He added though the numbers have been public for a while, he is expecting there will soon be some rumblings from residents.
Ed Deyermond, Southampton’s sole assessor and a resident on the East Hampton side of the village, said on Monday, “It’s going to be a really difficult time for people in East Hampton.”
Deyermond explained that there could be a 39 percent increase in school and town taxes for some village residents in East Hampton.
Bernard said that the number of homes on the East Hampton side of the Sag Harbor School District are far fewer than those on the Southampton side of the district. The number of parcels eligible for STAR exemptions in the Sag Harbor School District, according to Bernard, are 1,563 in Southampton Town jurisdiction and 226 on the East Hampton side. The STAR program is the New York State School Tax Relief program.
“It is unfortunate that with such a small increase in the tax levy one segment of the taxpaying public has to bear the full burden of paying for it,” Sag Harbor School Superintendent Dr. John Gratto said. “The district, though, has no control over how the towns assess their properties, how the state sets equalization rates and how the law dictates the manner in which we allocate the tax levy across towns.”
State Aid
In a release sent out last week by New York State Assemblyman Fred W. Thiele Jr., he said that Governor David A. Paterson produced a Budget Deficit Reduction proposal calling for $2 billion in budget cuts for 2008-2009 and $3.2 million for the state’s 2009-2010 budget.
The reduction as proposed by the governor and as explained by Thiele would have been a reduction in $162,924 for the Sag Harbor School district and Bridgehampton was expected to see a loss of $73,925. Southampton town would have seen a reduction of $231,650, and East Hampton would see the biggest loss on the South Fork — $246,347.
Of the state legislators, none supported the proposal and no action was taken. A release last week from assemblyman Thiele’s office stated, “The Governor’s meat axe approach to cutting aid to education, local governments and hospitals was ill-considered,” it further added, “The result would have been higher property taxes, loss of essential services and a further economic decline.”
Thiele argued that the state has a rainy day fund with $1.7 billion – which he suggests should be applied to the deficit. Thiele also said that since January 2007, the state bureaucracy has added 6,000 positions. He asked that a retirement incentive be created to reduce the size of the workforce. Thiele also suggests the possibility of a hiring freeze, a freeze on state employee travel, and other small eliminations that could save some dollars.
A statement released on Tuesday from the Governor’s office said Paterson wrote an open letter to New York State school board presidents and district superintendents to notify them that “because the mid-year reductions were not enacted, deeper reductions in education spending will now be required in next year’s budget to close the State’s budget gap,” and that he is notifying them now to allow them to plan accordingly.
“The rejection of a mid-year School Aid reduction by the Legislature means that deeper declines in funding for school districts will now be necessary in 2009-10 to ensure a balanced budget,” Governor Paterson said.