Financing County Government
The Office Budget and Management
The County Charter requires the County Executive to manage the entire budget- making procedure for Operating, Community College and Capital Budgets. The Operating Budget is the largest and most complex budget prepared by this division.
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Preparing the Budget The process of collecting tax monies and paying for government begins with preparing the annual budget. A budget is a plan of action for the coming year expressed in dollars and cents. New York State County Law and the County Charter require that the Suffolk County Executive submit a budget annually to the County Legislature, outlining appropriations (estimated expenses) for the coming year and indicating the expected sources of income. Two public hearings must be held by the County Legislature so that citizens may ask questions and give opinions after the budget is submitted. County Legislators may recommend changes in the budget. Once the Legislature votes to adopt the budget, the County Executive must sign it or veto all or part of it. The County Legislature then has a set period of time in which to override the vetoes. The County Charter sets deadlines for submission and adoption of budgets.
Suffolk County Budget Procedures The County Executive is the Chief Budget Officer in Suffolk County. He appoints a Budget Director who oversees the preparation and implementation of all County budgets for the County Executive. County departments send their requests for the next year's budget to the Office of the County Executive. After the submissions are analyzed, the Office of the County Executive prepares the County Executive's budget request, which is sent to the County Legislature where it is reviewed and analyzed by the Legislative Budget Review Office and the Legislature. The Legislature then votes to adopt or modify the budget. It is then sent back to the County Executive for approval or disapproval.
The Suffolk County Budget consists of an "Operating" or expense budget and a "Capital" budget. The fiscal year for the County is the same as the calendar year: January 1 through December 31. The budget for the Suffolk County Community College is approved prior to the start of the academic year (September 1-August 31), and is considered separately from the other two budgets.
When all three elements of the budget are approved, the Legislature must levy the necessary real property taxes. The Suffolk County Tax Act states that taxes must be levied by December 1. Therefore, the Operating Budget should be adopted early enough in November so the ten towns can receive the information they need to send out tax bills.
Capital Program and Capital Budget The Capital Budget is the first budget enacted in the fiscal year. It contains the estimated dollar cost of capital projects for the given year. All items included in the Capital Budget must have been included in the Capital Program, a long-range plan that sets and estimates costs of capital projects. Although the Capital Program is a forecast of the planned capital expenses for the next three years, some capital projects will extend beyond that period. Therefore, each year a new three-year forecast is prepared. Acquisition of land, construction of facilities for long-term care, jails, sewage facilities and improvement of highways are examples of the items included in a capital program.
Capital projects are traditionally limited to public improvements or purchases of major equipment requiring large outlays of capital.
The Capital Budget can be amended during the fiscal year by a Resolution introduced by the County Executive and approved by two-thirds of the County Legislature in a roll-call vote. However, such amendments must coincide with (1) offsets from other projects or (2) at least 50% State and Federal funding. Once the Capital Budget is adopted, it can be changed, but the total budget amount cannot be increased unless there is a declared emergency. Technical changes require a three-fourths vote.
Operating Budget The Operating Budget contains the operating expenses for all County departments and agencies for the fiscal year. These expenses include the costs for personnel, supplies, equipment, and maintenance and repair of equipment and buildings.
SOURCES OF REVENUE
Property Tax The property tax is based on assessments and is paid by everyone who owns land. An Assessment is based on the value of the land plus the value of any improvements. There are several approaches utilized to determine the value of property.
The County Executive's Office prepares the budget showing how much the County is projected to spend for all purposes. The County Executive then estimates the amount of State and Federal aid and other revenues that will be available. The balance is derived from property taxes.
Constitutional Tax Limit The New York State Constitution sets a limit on the amount raised by the property tax for County purposes. This tax limit is 1.5% of the full market value of taxable real estate, averaged over the last five years. For villages the limit is 2%. Towns have no limit and neither do the school districts in Suffolk County.
Sales Tax The tax margin is the difference between the tax limit and the amount of property tax raised. In 1970 this tax margin became so small that the County Legislature decided for the first time to levy a sales tax.
The State of New York levies a State-wide sales tax of 4% and permits local governments to levy additional sales taxes of up to 4%. Additional sales taxes above 4% may be authorized by the New York State Legislature for specific purposes, such as sewer construction or for water quality protection programs.
State and Federal Aid About 40 years ago, County Government was financed almost entirely by property taxes, Federal and State mandates were minimal, and usually 50% or more of the costs of such mandates was covered by State or Federal monies. Over the past decades, mandates to provide numerous services, such as the enforcement of health and social services, have shifted from the Federal and State governments to local governments. While the responsibilities have increased, the State and Federal share of the cost of meeting these responsibilities has decreased, leaving local governments to raise taxes to cover the cost of their increased responsibilities. Unfortunately, the revenue from property taxes has not kept pace with the rising costs of State and Federally mandated programs. In looking for other sources of revenue to fill the gap between taxes and the cost of government, the County has found it necessary to increase revenues, the most notable being sales tax.
Other Revenues County revenues from other than tax sources come from Off-Track Betting, County Clerk fees, motor vehicle fees, charges for various admissions, repayments for social services rendered, and monies from licenses, permits, and interest on money deposited in banks.
Special Districts Special Districts, sometimes called "improvement districts" or "special benefit districts," are formed when part of the County requires a service not otherwise by a vote of local taxpayers and is administered by the County and financed by a special tax on local property owners.
The Debt Limit The New York State Constitution sets a limit on the amount of indebtedness that counties may incur. This debt is 7% of the full value of taxable property, averaged over the last five years.
Under New York State Law, all property is subject to taxation unless specifically exempted by statute. Real property in each assessing unit must be assessed according to the condition of the property on taxable status date (March 1st in Suffolk County) at a uniform percentage of value. This is the standard of assessment prescribed by NYS Law (PRTL, Section 305, Subdivision 2). The local assessors make the listing and valuation of real property for purposes of taxation (and the determination that real property is exempt from taxation). Since Suffolk County does not have a Board of Assessors, all assessment is done by the town and, in some cases, the village assessors. These officials can be either elected or appointed.
Assessors are required to receive training approved by the State. Training is provided by the State and the County Real Property Tax Service Agency (RPTSA). All assistant assessors or field personnel must meet minimum Civil Service requirements. In the western Towns of Babylon, Brookhaven, Huntington, Islip, Smithtown and the eastern Town of Southampton, town assessors are appointed for six-year terms; in the remaining four eastern Towns of East Hampton, Riverhead, Shelter Island, and Southold, they are elected for four-year terms.
Individual taxpayers may examine the assessment rolls at their town assessment offices. These tentative rolls are published on or before May 1 of each year. Property owners and tenants who are required to pay the property taxes pursuant to a written agreement or lease are eligible to file a complaint to reduce their assessment. The complaint, with supporting documentation, must be received by the assessor prior to grievance day (the fourth Tuesday in May) or the Board of Assessment Revies (BAR) on grievance day. Protests are then reviewed by the BAR. No elected official or assessor may sit on the BAR. The Board then makes the decision to lower the assessment or keep it the same, but never to increase it.
TAX RATE AND EQUALIZATION RATE
The budget sets the tax levy. That is, the amount to be raised by property taxes. To calculate the tax rate, the amount of the tax levy is divided by the total value of all taxable property.
Each town in Suffolk County sets its own property tax rate. Preventing inequalities of assessment figures between the different towns is the job of the New York State Office of Real Property Services (ORPS). By comparing market values with the assessed values of sample properties, the ORPS calculates an equalization rate for each assessment area. The equalization rate is a percentage of value (estimated fair market value). For example, an equalization rate of 50 means that the assessed value is 50% or one-half of the market value.
Under State Law, property owned by a government or by certain non-profit organizations, such as hospitals, religious groups and educational institutions, is not subject to property taxes. Property owned by veterans and by some elderly people is exempt from a portion of the property tax. The amount of tax-exempt property in Suffolk County is considerable and has a commensurate impact on taxation.
REAL PROPERTY TAX SERVICE AGENCY (RPTSA)
TRPTSA is an agency mandated by the New York State Chapter Laws of 1971. It was created to maintain the Official Tax Map and support the assessing units in the County. That support includes, but is not limited to assisting in the training of local assessment officials and in procedures for the preparation and maintenance of the tax rolls. The Director of the RPTSA is appointed by the County Executive for a term of six years.
The Suffolk County Tax Map is a map which indexes and lists all property within the County. The map was completed in June of 1975 at a cost of $3 million. Specifications for the tax map are set by the New York State Office of Real Property Services. The index to the map is intended to provide a complete history of each parcel of land, including a current record of changes. In 1997, 444,950 index changes were made to the 568,527 parcels currently mapped in Suffolk County. In addition, 210,197 tax map numbers were assigned to documents certified by RPTSA and recorded in the County Clerk's Office. Also in 1997, the drafting unit of RPTSA made 11,636 changes in the official tax map.
The total full equalized value of all property in Suffolk County in 1997 was $95,047,773,108.