Orangetown Board Votes Against Overriding Tax Cap

The Orangetown Town Council voted 3-2 against a local law that would have allowed the town to override the two percent tax cap for the 2012 Orangetown Town Budget during its regular meeting Wednesday.

Supervisor Paul Whalen and Councilmen Michael Maturo and Tom Diviny voted against the law. Councilman Denis Troy and Councilwoman Nancy Low-Hogan voted for it.

Town attorney John Edwards recommended that the council pass the law, in part as a protection from potential issues with the enforcement of the 2 percent tax cap, which was passed by the state earlier this year. He was not the only one to express disagreement with the vote.

"I cannot believe these people pivot," said Orangetown Director of Finance Charlie Richardson. "A month ago, people were not willing to make cuts. Now all of a sudden they are magically going to happen. I cannot believe this. This is unbelievable."

The Supervisor's proposed 2012 budget calls for a tax increase between 7 and 7.5 percent, mostly due to the $2.36 million tax settlement with Pfizer and other settlements. It cannot pass without an override of the tax cap. The deadline for the town council to pass a budget for 2012 is Nov. 20, so the board has less than two weeks to cut more than $2.4 million from the budget. Due to exceptions in the tax cap law, the actual number the town has to reach is 2.23%.

Whalen called for a meeting with the Orangetown department heads Thursday to discuss potential cuts. The council discussed setting an official meeting for the budget, but did not settle on a day.

"This should have been going on all the way down the line," Troy said. "This is the Supervisor's budget. We are sitting here Wednesday night talking about a 7.5% (increase). Now, poof, that goes away and we have to get to two percent.

"You better tell me how you're going from 7.5 percent down to two. That's quite a challenge."

Public Hearing

At the beginning of Wednesday's public hearing on the law overriding the tax cap, Troy asked Edwards to explain why he was recommending the law be passed.

"The danger as I see it in not overriding derives from the fact that it is a new law that has to be applied, interpreted and will be applied and interpreted at the state level," Edwards said. "If you adopt a budget which requires a tax levy that is ultimately in excess of the two percent tax cap, but you haven't overridden the limitation set by the state law, you have to take the excess amount collected in taxes and put it in reserve to apply for use next year, which would leave a shortfall funding 2012 expenses."

Edwards explained that for the first year of the law, he believes there is too much uncertainty not to pass the override just in case it is needed.

"To me it's like buying a first-edition phone or car and you expect there will be some glitches and you have to deal with those," Edwards said. "You might be better off waiting until the second model comes out.

"The board can strive to meet the two percent limitation. You can think you will meet the two percent limitation. I would still encourage you to override the cap simply to protect yourself from the uncertainties inherent in a newly-enacted statute that has never been interpreted before."

There were 10 residents that spoke up during the hearing, nine of which opposed passing the law overriding the cap. Former Orangetown Councilwoman Eileen Larkin spoke in favor of passing the law.

"The idea of even thinking about raising the cap ...for 2012 is an insult to the residents of this town who are trying to survive an economic crisis," said Michael Mandel of Pearl River. "It's time to think of ways to reduce spending, not tax our way out of a problem that creates more problems."

Beth Riso of Nyack criticized the salaries of town employees that she found in the budget as being too high.

Carol Silverstein of Orangeburg said that the board had no right to pass such a law, in part because three members of the board will not be there in 2012. Though the results are not official yet, Whalen lost a close race to Andy Stewart for Orangetown Supervisor Tuesday night. Low-Hogan won the District 17 seat on the Rockland County Legislature and Maturo chose not to run to keep his town board seat.

The Vote

In the end, Whalen and Maturo voted not to pass the override. Maturo said it was because he believes the town should use more of its reserves to reach the cap. But he also defended the board from charges that it has not worked hard enough to make cuts.

"To have anybody in the public saying that somebody here is doing anything wrong or evil is disingenuous," Maturo said. "I do not believe we have used enough fund balance. The only reason it is there is for a rainy day and it has been pouring for three years. We have already made brutal cuts."

He added that it is a gamble that the town and the public can find other ways to maintain services that might be lost to further cuts.

Diviny said he has had problems with the proposed budget all along and sent an email to the rest of the board Nov. 4 saying that he would vote against the override. Whalen said only that he had no problem with getting down to two percent.

Low-Hogan and Troy both said they voted for the override because they were concerned that the council would not be able to get the budget down under the cap.

"I'm telling you we are committed to working to get down to two percent, but I don't know if we can do that without layoffs," Troy said.

"We have to allow for the possibility that we may have to go over the two percent. It may be 2.5 percent. I'm going to vote yes," Low-Hogan said.