The city held the first of two public hearings on the proposed 2023-24 budget Tuesday night, at which a crowd of community members took advantage of the opportunity to voice their complaints, or concerns.
The proposed spending plan includes a tax rate of 12.74 percent — the highest in several years, and more than double the current 5 percent. The city plans to spend a total of $102.9 million, up from this year’s $95.5 million. The budget was released late last month.
“I say to the city that this is an urgency,” said council meeting regular James Hodge, who sported a “L.B. Cleanup” shirt, “and like the shirt and the organization that I wear, we look for City Council members that help clean up and help us with taxes.”
The proposed double-digit tax rate is mostly attributable to the city’s $75 million settlement with the developer Sinclair Haberman, who filed suit after the construction of a building he proposed was blocked. In 2015, the State Supreme Court in Mineola granted Haberman a motion for a default judgment, in a case that has been wending its way through the courts for 15 years.
“The way the budget is structured, the amount that has to be paid to Haberman from this point forward will be in the budget for the entire time it has to be paid off,” Council President John Bendo said. “There will not have to be any additional Haberman money added to the budget.” This means that taxes will not increase again next year because of the settlement.
Haberman originally sued the city for $130 million, but over the years the suit grew to $150 million, and Bendo said that interest had been accumulating at $1.1 million a month. With the settlement, the city must now pay Haberman $5 million per year — a financial obligation that has been nicknamed the “Haberman levy.” If the city had not succeeded in winnowing down the settlement, next year’s tax rate would have been 26 percent, according to Bendo.
In a statement last week, the city referred to the so-called “homestead” tax rate, which is paid by homeowners: “The property tax revenue increase is proposed at 12.39% for Homestead, or approximately $574 per the average valued home. The Haberman payment constitutes 83.4% of the Homestead Tax Rate increase. Without Haberman, our increase would be 2.06% or approximately $108 per household. The impact to correct the financial crisis is unfortunate and acknowledged.”
“You had said the levy for the homestead would be $574,” attendee Ron Paganini said. “The above-average houses are going to be close to $1,200, though. I just wanted to clarify that it’s a sliding scale for everybody. It’s not good.”
The non-homestead, or commercial, tax rate, will be just under 44 percent next year, compared with the current rate of 38.4 percent.
Tax rates for homeowners were in double digits in the early 2000s, and rose as high as 15 percent in 2013.
Another notable budgetary item was overtime pay for city firefighters, which is up slightly in the spending proposal, to $1.2 million from $1.19 million this year. Overtime has been a hot topic of conversation in recent months.
“I understand the standard practice there, to call in sick and have another buddy come in and do overtime, and they rotate that process,” Resident Christina Kramer said. “Is there a lot of oversight, and can we lower the firefighters’ overtime?”
Police Commissioner Ron Walsh, the acting city manager, said the city was “keenly aware” of the overtime issue. “We fully hear every complaint,” he said. “We are aggressively going after trying to come up with a resolution for that, and I agree with you” that no firefighters should be paid hundreds of thousands of dollars in overtime. Last year, professional firefighter Sam Pinto was paid roughly $375,000 in base pay and overtime.
The city claims that its financial position has improved, and that it had been removed from the state comptroller’s list of the state’s most fiscally stressed municipalities.
The next public hearing on the budget is set for May 16, and a work session was scheduled for Thursday, after the Herald went to press.