Southampton Town Councilman Chris Nuzzi doesn’t like the 5-percent hike in the town’s tax rate for 2009 and last week offered a proposal to cut it in half.
Mr. Nuzzi said he wanted to pay back the General Fund some $3 million in Community Preservation Funds and use $1.5 million of that to reduce the tax rate, lowering it by half to 2.5 percent, with the balance going into reserve.
That plan failed in a 3-2 vote, as the board opted to keep the 5-percent tax hike in place. Supervisor Linda Kabot, Town Councilwoman Nancy Graboski, and Town Councilwoman Anna Throne-Holst voted against Mr. Nuzzi’s measure. Councilman Dan Russo voted with Mr. Nuzzi. The majority agreed with Mr. Nuzzi and Mr. Russo philosophically and voted to pay back the General Fund but dump the entire $3 million into reserve instead.
In August, the town purchased 5.7 acres of property on Mill Road in Westhampton with money from the General Fund. Mr. Nuzzi’s resolution, introduced at the board’s November 25 meeting, would have taken $3 million of CPF revenue and placed it in the General Fund to pay for the land purchase.
While the board members who voted against the proposal said they understood Mr. Nuzzi’s motives, in their opinion, leaving the tax rate at 5 percent and setting the entire $3 million aside was the more prudent move, considering today’s economy. Currently, the town is facing a $7.5 million deficit as the various revenue streams running into town coffers continue to dwindle.
Ms. Kabot said the money would be better used in 2010, not for 2009. While the supervisor said she would like to see the tax rate even lower, she pointed to other nearby towns whose rates had increased 15 to 20 percent. “I would like to see more tax relief,” she said. “But I think it would be better used for 2010.”
Mr. Nuzzi and Mr. Russo, on the other hand, argued that the board should provide as much immediate tax relief as possible. “In this economy, any relief is helpful,” Mr. Nuzzi said.
However, Ms. Throne-Holst said the estimated $16 in savings on a house valued at $500,000 that would be seen under the councilman’s plan was not worth it.
“What we were looking at six months ago, or even six weeks ago is not what we are looking at today,” Ms. Throne-Holst said, adding that by artificially lowering the tax rate even more for 2009 could possibly put the town into a deeper hole for 2010. “The economic future is uncertain,” she said. “Lowering what is a reasonable tax rate could harm us down the road. Better to put all of it in reserve.”
In crafting her 2009 budget, Ms. Kabot allocated $4.5 million in surplus in order to stabilize the tax rate at 5 percent, the maximum percentage allowed under the town’s tax cap law.