‘Tax Levy Pause’ Unlikely in 2027

By Holly Crocco

Discussion regarding what to do with the county’s $191 million fund balance continued last week, with lawmakers debating whether a “tax levy pause” would be doable in 2027, or if it would hurt the county’s financial standing.

“I’d like to reframe it is a tax levy ‘timeout’ for 2027,” said Legislator Dan Birmingham, R-Southeast, during the county’s Sept. 22 Budget Committee meeting. “We had a $1 million tax decrease this year. And $1 million out of $163 million, some would call that meager. I’m calling it meager.”

The $1 million tax levy reduction resulted in a 2026 property tax rate of $2.39 – the lowest it has been in nearly 20 years.

Lawmakers won’t know what the county’s fund balance is currently at until the county executive’s tentative 2027 budget is presented Oct. 5, but as of December 2024, Putnam reportedly had $191 million in its reserves – $163.3 million of which is in “unrestricted surplus,” according to Birmingham.

For 2026, the county’s tax levy – the amount of money the county collected from residents to make up the difference between revenues and expenditures – was $45.2 million. Given that the unrestricted fund balance is three times that number, Birmingham started a conversation about whether the county has the means to not collect any real property taxes in 2027.

Birmingham acknowledged that if no tax levy was implemented in 2027, it would strictly be a one-year relief, as the county doesn’t have enough in its coffers to sustain another year. So in 2028, the tax levy would need to either go back to the $45 million implemented in 2026, or higher.

Another important thing to consider is that New York City is the largest taxpayer in Putnam County, due to ownership of all the reservoirs, and the utility companies are the second largest taxpayers, which means both entities would also be getting that tax “timeout.”

Legislator Jake D’Angelo, R-Carmel, said that while the county doesn’t want to overtax its residents, it also wants to keep operating in the black. “There is such a desire for an investment in our infrastructure – not just to beautify our county, but to incentivize business,” he said, noting that the funds could be used for various county projects.

Additionally, he questioned whether giving homeowners a savings of a couple-hundred dollars for one year is worth missing out on the collection of $45 million, or more, this year and possibly upsetting the county’s financial footing.

Legislator Amy Sayegh, R-Mahopac Falls, said Rockland County tried a similar move in 1988, when it suspended property tax collection for homeowners and business owners because it had a surplus it sought to return to taxpayers, and it backfired. While homeowners received about $410 that year, she said the initiative led to long-term financial strain on the county, a bond rating downgrade, a multi-million-dollar deficit, and an overall budget crisis.

“Putnam County right now is on solid financial footing, particularly now as interest rates have risen in recent months,” she said. “Our fund balance allows us to pay cash for projects and equipment, and invest in infrastructure rather than finance every purchase, thus avoiding high borrowing costs.”

In addition, funds held in savings generate additional revenue for taxpayers. “As interest rates go up, the savings that we have also accumulates interest,” said Sayegh.

While she said she wouldn’t support a year of no property taxes, she would like to see a reduction in spending that incrementally lessens the tax burden on residents each year. “I would support gradually lowering taxes, but not pausing them for one year,” she said. “That’s too great a gamble.”

Legislator Nancy Montgomery, D-Philipstown, said she doesn’t think pausing property tax for a year would have the outcome that’s intended. “I think we’re kind of characterizing it as tax relief, and I don’t know if I’d look at it that way,” she said.

Montgomery suggested that the way to provide meaningful relief is to use the funds to provide greater services, helping the towns and villages provide better programming, and stepping up to support local fire departments and EMS needs so that municipalities don’t have to borrow and tax for these things.

“Those services, that equipment, all of that comes from the town budget,” she said. “Those are the kinds of ways I prefer to give back, and if we do the levy pause, my fear is we aren’t going to see any of that. Town taxes are going to go up.”

And the municipalities are really struggling, according to Montgomery.

“Thirteen-million-dollars is an annual budget for a town in Putnam County, $5 million is an annual budget for a village, $350,000 is an annual budget for the Village of Nelsonville, and we’re talking these numbers and we can’t give them equipment for their fire departments, EMS departments, provide mental health services, provide transportation for these towns – it boggles my mind,” she said.

Legislator Laura Russo, R-Patterson, agreed.

“Let’s offer services back, let’s pave more roads… let’s get some more mental health services,” she said. “Let’s use the money we have in surplus for our taxpayers who are residents, not New York City.”

Legislator Erin Crowley, R-Mahopac, said she would also like to see seniors who have sold their homes and now rent, and other residents, reap any savings offered. “I would like to see the people that live here – whether they own a home or not – benefit,” she said. “Invest in the people that live here.”

Acting Putnam Commissioner of Finance Alexandra Gordon said the fund balance is used to balance the budget, and with inflation, contractual lines increasing, energy costs spiking, she’s going to have to use more funds from reserves to balance the 2027 budget.

She also said the tax levy has been consistent since 2020. “So to say that we are overtaxing, I have to disagree,” said Gordon, who opined that a property tax levy pause would not be in the best interest of this county.

“It would not be fiscally responsible,” she said. “The revenue has to come from somewhere. We are in very unclear times. There is a war going on. I have no idea what’s going to happen. Sales tax – people aren’t spending as much because things are expensive…”

On a related topic, Brewster Mayor James Schoenig approached the county about reducing or eliminating the 4 percent fee applied to residents who choose to pay their school taxes in two installments.

Currently, residents get their school tax bills at the beginning of September, with payment due by Sept. 15. If they cannot, or choose not to make the full payment, they can pay half then, and the other half in March – with a 4 percent fee applied. Since the schools need the full amount of taxes upfront to operate, the county “loans” the money make them whole until the second installment of taxes is made by homeowners.

“If you’re sitting on $163 million, why are you going to come after the people who are paying their taxes?” he asked.

Legislator Toni Addonizio, R-Kent, agreed. “Many people who pay in installments can’t afford to pay their whole bill all at once, and now they have another fee on top,” she said. “So I would be in favor of a smaller fee.”

Birmingham said he would like to see a comprehensive tax relief package come together, whether that includes an extension of the gas tax holiday, removal of various fees, or other initiatives.

“If we get rid of the fee, we’re actually giving somebody a tax decrease, and I’m OK with that,” he said. “We are in a position where it is embarrassingly negligent of us not to start talking about returning a significant amount of this $163 million back – in services, yes. But, darn it, it has to go back to people’s pocketbooks as well.”

No action was taken on the matter.