State Comptroller: Base Tax Levy Cap to Decrease

The New York State Comptroller’s Office recently announced that the base tax levy cap applied for local governments for 2016 will be tightened to “significantly less than 2 percent.”

“At a time when our residents are looking for significant increases in our enforcement of local laws and more police and code enforcement staff to address quality of life issues in hamlets like Montauk and Springs, we are being told by the State that in order to do so, you may have to pierce the levy cap that is half what it was originally intended to be when the law was passed,” Supervisor Larry Cantwell said in a press release.

The tightening will set the cap at 0.73 percent for 2016, compared to 1.56 percent for 2015.

“Although the allowable levy growth factor represents only one component of the complex, multi-step calculation of the tax cap, it’s an important one,” the announcement from the State Comptroller stated.

The comptroller also estimates that these calendar year local governments will have roughly $88.3 million less in available tax levy growth compared to what they had in 2015 when the factor was 1.56 percent, and $135.1 million less than they would have when the factor was at 2 percent as it was in 2012 and 2013.

The State’s current calculation for East Hampton Town estimates that the final cap levy allowed for 2016 will be $1,095,000, compared to $1,694,400 in 2015 – a 35 percent decrease.

“This creates tremendous stress on the Town as it gears up to begin the 2016 budget process,” the Town wrote in a press release.

For example, the Town is looking at an increase in health insurance premiums of between 6.4 percent and 8.6 percent, based on the most recent projections from the New York State Health Insurance Program, according to the release.

“It is more than ironic that the State Health Insurance Program, for which we are a participant, is telling us rates could go up by as much as 8.6 percent on one hand,” Cantwell said. “Then, on the other, the State is telling us the base increase allowable for our tax levy is 0.73 percent. Something seems inherently wrong with a system that produces these scenarios for local governments.”