Tag Archive | "Southampton Town Budget"

Southampton Town Budget – Almost There

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In a year where numbers seem to be increasingly important – the Southampton Town 2009 budget shows that the changes in the tax rate are as high as they are permitted to go.

Residents in the town will see a five percent increase, which is the highest increase permitted in the town. For this year the increase is set to be $1.32 per $1,000 of assessed value, up from $1.25 per thousand last year.

Last year residents paid $629.10 in town taxes on a home worth $500,000 the budget proposes for 2009 that residents will pay $660.55 — an increase total of $31.45.

Supervisor Linda Kabot explained that the 2008 tax rate was 0 percent over the 2007 tax rate, but this year, the tax rate increase is five percent, which is capped by law and cannot exceed five percent over the previous year.

Also in the tentative budget, the total spending of the budget is $82.5 million, up from $76.7 million last year, inclusive of debt service for prior capital expenses, which includes beaches, docks, building and zoning, waste management funds and deficit allocations for prior spending in 2004-2007 for the police and highway funds, which total over $7 million.

Last week at a last and final board meeting on the town budget for 2009, Kabot said there was only one amendment filed so far for the tentative budget and that had to do with Community Preservation Fund (CPF) PILOTS for certain areas west of the Shinnecock Canal. The program gives tax breaks to residents in areas where large parcels have been taken off the tax rolls due to CPF purchases. In the tentative budget, Kabot proposed $3.8 million for the PILOTS program in 2009, while council members Anna Throne-Holst and councilman Chris Nuzzi proposed a larger amount for the program.

In 2007, the year-end audit indicated that 10 town funds are in the deficit position and owe the general fund over $7.2 million. Kabot says these deficits arose over the years 2004-2007 as a result of several factors, including the town’s use of surplus monies from the general fund as “one-shot” revenues.

Kabot said that during financially stable times, the town had allocated budgetary surplus to several different purposes.

Budget revenues for 2009 include $4.5 million appropriated from the surplus in order to artificially reduce the tax rate because of the five percent tax cap. The $4.5 million comes out of a variety of funds, including $2.25 million from the tax stabilization rainy day fund; $500,000 from part town land management fund; $1.5 million from the land management enterprise fund and $175,000 from the E-911 fund.

In Kabot’s tentative budget, she shows the rainy day fund balance for 2010 to be nearly $800,000. The budget, as proposed by Kabot, will have a general fund operating balance of just under $1 million.

Southampton Town board members have elected to not take a raise for 2009, and outlined in the tentative budget is a union employees’ raise of 2.5 percent, which has not yet been confirmed. Councilwoman Anna Throne-Holst suggested last week that the raise be reduced to 1.5 percent. Throne-Holst has also proposed to shorten the workday by a half hour to save money. In addition all vacant positions in town hall left open for 2009 have also been abolished and Kabot says they will not be filled. 

Modest Increases in Face of Shortfalls in Southampton

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“If I sound tired, it’s because I am tired,” Southampton Town Supervisor Linda Kabot said on Monday. Last week Kabot was practically pulling all-nighters going over budget items and changing the previous language to a more legible version along with the town’s deputy supervisor, Richard Blowes, and town comptroller, Steve Brautigam.
Early Monday morning the Southampton Town Board gathered to review the tentative budget. The proposed 2009 budget will total over $80 million, up from last year’s of $76.7 million budget.
As part of her 10-page budget message, Kabot explained that, “The total amount of surplus being applied to reduce tax levies is over $4.5 million, which includes $2.25 million from the ‘rainy day fund’ (restricted general fund) as a ‘bail-out’ for waste management for 2009, and to cushion the impacts of increased police and highway taxes.”
During Monday’s meeting Kabot presented the budget to fellow board members who will have until November 20 to review and make a decision on whether to adopt this tentative 2009 budget. Kabot explained how the town’s $4.5 million deficit in the police department, and the $2 million in waste management from 2007 have to be included in the 2009 budget by law.
“Southampton Town is now in a negative financial situation,” Kabot said. “Property taxes must be increased to not only cover current operating expenses and prior deficits, but also ensure adequate reserves are on hand to maintain the town’s high bond rating for the Capital Program.”
Recently the bond rating for the town from Standard & Poor’s was raised from an AA+ to AAA.
In the police fund and highway fund, Kabot has proposed a five-year deficit reduction plan. For the next three years, the budget will pay $750,000 to the police deficit and in 2012 and 2013 $800,000 will be applied to the deficit to give it a zero balance by 2013. For the highway fund’s roughly $750,000 deficit, the tentative budget suggests $150,000 for the next two years, and $250,000 for the three years following to pay it off in its entirety by 2013.
Kabot also explained that last year, the tax rate was set at $1.25 per thousand and it was the same as 2006 because there was a freeze in the town. For 2009, she proposed a mandate of $1.32 per thousand for taxpayers.
“For a home that costs, $500,000 that person will pay an increase of $31.45 for the year,” Kabot said.
This is the total possible increase that the town can apply to the tax rate, which by law may not increase more than five percent from the previous year.
According to Kabot, half of the mortgage taxes collected in the town are usually included in the budget.
“We budget for it, we rely on this, it keeps the property taxes down,” she said adding that due to the decline in building and construction activity, “This is not as fat as it used to be.”
Kabot says that the mortgage tax receipts will be dedicated for payment of debt service and the Capital Program, rather than operating as a subsidy to the general fund, as it has been in the past.
Last year mortgage tax receipts were just over $12.5 million and the tentative budget outlines the first half of this year is only $4.2 million. The Community Preservation Fund is also down from last year —an estimated $32 million is expected for 2008, down from $55 million collected in 2007.
Councilwoman Nancy Graboski said after the meeting that with the five percent property tax cap, it becomes very difficult to produce a clear and concise budget.
“It’s tough all over, with this economy,” Graboski said, “We’ve all had to sharpen our pencils and tighten our belts.”
“This gives us a very clear picture, we have all the numbers, and it’s accurate,” she continued, “We have serious deficits and we have to address all these concerns.”
Graboski, also said this is the first time the town has ever had this type of analysis.
“I can’t wait to go home and read it,” she noted.
The Southampton Town Board will had two more meetings this week on financial issues, and will vote today on whether to hold a public hearing for Friday, October, 24.