Village Adds to Debt for Taxpayers to Pay

Third in a series of articles about the upcoming Patchogue Village Budget and the need for an immediate tax freeze. In my last blog about a week ago I commented about several different issues involving taxes in Patchogue Village. In the time since I have discovered why so many people opt out of participating in the budget process even when their money is at stake: kind of complex and as a result frustrating leading to quick burn out and its end result apathy.

So as I teach myself I hope that others along the way will contribute information that will make this whole process a bit easier to understand. It has to become a clearer process to all otherwise what will happen in the future is what has already happened: those who know more will control all the decisions and those results may not be at all in the interests of the tax payers of the village.

Updates Tax Grievances:  the deadline for grieving village taxes has passed. This is not a process that a lot of people seem to use myself included. But some are and benefitting quite a lot. When most do not but some do the net effect however is that those who did not in the end pay for those who did. It works something like this and while this is perhaps a simplified analogy I think it works. I have a supermarket shoppers card. I did not always have but one day I read an article about how that works. Those who have the card get the discounts, those who do not wind up paying by paying the regular and higher prices and thus subsidizing the discounts of card users.  So I got a card. Tax grievances work something along the same line. If you file and win something of what you put in for or all it gets rebated to you plus future tax liabilities are lowered too. Nice deal. But the catch is this: someone has to pay for those rebates because the tax roll is set, a gross amount of money has to be raised and if some pockets are now filled others have to be emptied to get back to the bottom line. I am now working on a list of the major tax rebates that were paid back to grievants in the last year to be published when I have completed a list from available public records. Spoiler alert: business owners, at least one a millionaire, are the biggest beneficiaries of this process. All legal but facts are some are making out pretty good because they have the resources to use the system open to all but in fact used by a knowing few more often than not.  More to come…

Update: BAN and bonds. Last week the Patchogue Village Board went into debt for more than a million dollars. One BAN (bond anticipation note) was for an initial five year period in the amount of 350,000. This is to pay for the leaking Patchogue Theater roof. There is an option to extend the repayment time by another five years if needed. No figures on the interest rate for this BAN was presented at the meeting or any breakdown of any fees that will be needed to transact this BAN either. All that left to the village treasurer to work out. So the full cost of this BAN will not be known for some period of time. The BAN was avoidable, the village does have a surplus in its general fund of somewhere between three and a half and four million dollars (again not exactly known at the meeting but this was the range mentioned). That amount could have been paid out of the surplus which would have been lowered but by doing so no interest and fees. The same kind of decision anyone of us has to make at one time or another: pay off the debt now or take the easier but more expensive road instead. On top of that an 800,000 dollar bond taken for at least five years (that can be extended for up to 30 years) to replace and upgrade a near obsolete sewer pumping plant on south ocean avenue.  Again interest rate and fees left to the village treasurer to arrive at and no specifics provided as to the final end costs of the bond. Sentiment at the meeting leading to the approval of both measures was that the village could manage the payments that means actually that the village tax payers could manage the payments of course.

Bonds and BANs don’t work like a supermarket discount card. Short term borrowing works just like any short term loan. The village gets the money up front but does have to pay it back since nothing is for free and quickly.  Longer term bonds work more like a mortgage payment: more to borrow but longer to pay and more to pay back in interest.

In terms of thinking about a tax freeze and how to get there these two borrowing initiatives represent choices not made this time around but which still can be made in the future as steps that are needed to freeze taxes at a two percent level. And if the Governor gets his way all of us will get tax rebate checks too.

Tax calendar: date not yet announced for possible piercing of the tax cap by the Board, and date not yet announced for the adoption of the next budget along with a public hearing on that decision before the Board votes.

Next blog: how much longer will the Village of Patchogue pay for repairs to the Patchogue Theater when there are so many other roofs so to speak to fix in this village too? Who grieves their taxes and what happens when they do?