Valley Stream pierces state tax levy cap

The Village of Valley Stream approved a property tax levy increase on Monday that goes well above the state’s cap this year, which will translate to an increase of about $140 on the average homeowner’s tax bill. The measure is a departure from the village’s trend in recent years of using its reserves to pay its bills rather than relying on tax increases.

“We recognized as a board that we were put on the [state comptroller’s] fiscal stress susceptibility list, and we directed Budget Officer Mike Fox to address that — to not use the fund balance and make sure that was equalized,” said Mayor Ed Fare.

The 6.84 percent increase in the tax levy comes after last year’s 1.64 percent increase, which meant a $70 to $75 increase on the average homeowner’s annual bill. The state’s cap this year is just .29 percent.

The trend of reserve spending was part of the reason the village made the list this year, its first appearance since Comptroller Thomas DiNapoli started the list two years ago as an early-warning system for municipalities and school districts. The “susceptible” category is the least urgent level, after “significant” and “moderate,” but the classification could contribute to a downgraded bond rating should the village use bonding while it’s on the list. John Mastromarino, a financial consultant for the village, told the board of trustees last month that the village would have to “straighten out” in the next year or face that consequence.

“We’re still at a very good bond rating, but it just points to the fact that you have to generate additional revenue,” Mastromarino said in March. “Now’s the time to stop the bleeding.”

The decision to eventually increase the tax levy was made five years ago, well before the comptroller’s warning, and is part of a long-term spending plan, Fox said. He added that this is the first budget in eight years that does not use any reserves. The consistent use of reserves, especially as harsh winters sent expenses soaring, reduced the reserve fund from $10 million to $2 million in that time. Fare said that the intention was to protect taxpayers in the wake of the recession.