WE NEED YOUR HELP — Support your hometown newspaper by making a donation.

2020 budget includes tax cut, revenue hike

Posted

Town of Hempstead Supervisor Laura Gillen submitted her tentative budget for 2020 on Monday, which featured a 1.73 percent property tax rollback as part of her response to what she called the “financially crippling impact” that the $10,000 federal cap on state and local tax deductions has had on local residents.

Gillen’s proposed property tax reduction, totaling an estimated $4.6 million, will effectively cut the town’s overall rates to their lowest level since 2010, she wrote in submitting the budget for legislative consideration.

Given Seaford’s and Wantagh’s comparatively lower median home values, the SALT deductions that play such a controversial role in some areas of Nassau County are somewhat less significant locally. In Seaford, which has median property taxes of $9,986, just as many homeowners are below the SALT line as there are above it, and only slightly more Wantagh homeowners, where median property taxes are $10,865, are affected by the cap.

In Wantagh, where the median home value is roughly $479,000, according to DataUSA, the average homeowner can expect to see a savings of roughly $185 under Gillen’s proposed budget. In Seaford, with a slightly lower median home value of $449,400, the average homeowner can expect a savings of roughly $173 next year.

Gillen said she is aiming for increased transparency with her spending plan. For example, she wrote in her executive summary, “For the first time in the town’s history, I have included the anticipated cost of separation pay associated with employee retirement.” Under previous administrations, she added, “the town has routinely claimed the savings for retiring employees” whose positions were being eliminated, without logging the corresponding obligatory payroll separation expenses, which effectively reduce some of the claimed savings.

“The tentative budget reflects all contractually required expenses … while also adding $5 million to the town’s reserve ‘rainy day’ fund,” Gillen wrote.

“Restoring the fund balance” — the town’s rainy day fund — to levels required by town policy was a “financially prudent item to consider in preparing the budget,” she wrote. Town fund-balance policy requires it to maintain one-third of the previous year’s audited expenses in an unrestricted reserve. The town has made progress in restoring its reserves, and is on track this year to add more than $8 million, with an additional $5 million projected for 2020.

Moody’s Investors Service cited improvement in Hempstead’s reserves as one factor in its upgrade of the town’s general obligation bonds in late 2018, and wrote that “continued improvements in rebuilding reserves and liquidity” in 2019 could lead to future upgrades.

Following the upgrade, the town also voted to refinance some $85 million of its debt, at a savings of roughly $6 million.

Additional revenue of $184.5 million — an increase of $6.6 million — will augment the reductions made to the tax levy. Sales and mortgage tax receipts account for more than 77 percent of the increase, according to Gillen’s proposal. “We have conservatively budgeted both [sales tax and mortgage tax revenue] at the 2019 levels,” she wrote. This year, interest income is “on pace to significantly outpace 2019 budgeted amounts,” she continued, and she expects the trend to continue in 2020.

Payroll constitutes the largest single item in the budget, at $165.7 million, including roughly $3.8 million in separation pay, with no budgeted raises for exempt employees. The number of employees will be trimmed from 1,836 in 2019 to an estimated 1,781 in 2020.

“Righting the town’s fiscal ship necessitates responsible and ongoing financial efforts, not only at the time the budget is being prepared, but during the year,” Gillen wrote. “For instance, in April this year, I instituted a hiring freeze. The unbudgeted payouts incurred in the first months of [2019] … necessitated this aggressive fiscal action in order to contain payroll costs and protect the pocketbooks of tax payers.”

The town’s cost of worker’s compensation, Gillen said, has been on an “unsustainable upward incline” in recent years. To help rein in that cost, the town has hired a new third-party administrator to “improve employee safety and to help curb associated costs.” Savings include the conversion of processing of claims from paper to digital format.

In a further effort to provide financial relief, the town board voted unanimously to explore “community choice aggregation” programs that would allow local residents to choose alternative natural gas providers. “Ratepayers will automatically qualify for this discount,” Gillen wrote, “but may opt out without penalty.” At an earlier news conference, she said that the program might be ready for implementation as the end of this year.

Finally, Gillen said that the town had secured $10 million in additional funding for downtown revitalization, as well as a $3 million New York State Environmental Facilities Corporation grant to begin the removal of the suspected carcinogen 1,4 dioxane from local drinking water. A pilot project will begin next year at the town’s East Meadow Water District water treatment plant.

In a joint statement last week, the Republican-majority Hempstead Town Board characterized the Democratic supervisor as “a tax hiker who has no budgetary credibility.”