Southampton supervisor argues for speedier mortgage tax payments

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As municipalities across Long Island struggle to balance their budgets, Southampton and other East End towns want their mortgage tax money sooner rather than later, according to a press release from Southampton Town Supervisor Linda Kabot’s office.

Suffolk County distributes mortgage tax revenue to towns, which in turn use it to pay operating expenses. Mortgage tax revenue, which is collected when mortgages are obtained, is distributed on a biannual basis to towns where the mortgages changed hands.

The East End Supervisors and Mayors Association unanimously approved a resolution on December 7 arguing for more frequent payments of the tax revenue, according to the press release. Ms. Kabot, who sponsored the resolution, has advocated for more frequent distributions of mortgage tax revenues owed to local municipalities and has called upon County Executive Steve Levy to move the initiative forward, the press release said. Ms. Kabot said mortgage tax revenue should be distributed on a monthly or quarterly basis.

“Since towns rely on mortgage tax revenues to support certain operating expenses, the ability to receive the proceeds on a timelier basis is critical to cash flow needs, particularly during tight budgetary times,” Ms. Kabot said in the press release.

Mortgage tax revenue in Southampton Town has dropped precipitously over the course of the economic recession. It hit $12.66 million in 2007, $8.37 in 2008 and is expected to be $5.5 million at the end of this year. In 2010, town officials predict $6 million in mortgage tax revenue at year’s end.

Ms. Kabot noted that the economic downturn has exerted considerable financial pressure on municipalities.

“Towns and villages are finding it more difficult to meet expenses according to their adopted spending plans,” Mr. Kabot said. “Like many households, they are living ‘paycheck to paycheck,’ and this plan would let the payments come sooner and with more accurate predictions regarding the amounts for the following month.”

Solid CPF

The Peconic Bay Community Preservation Fund has recently shown increased revenue over 2008 numbers, an indication that the special fund for land preservation is gaining strength despite the economic downturn.

In a press release, State Assemblyman Fred W. Thiele Jr. said revenues for September of this year topped $4.21 million, an 8.6-percent increase compared to revenues in the same month last year.

Nonetheless, overall revenue and CPF transactions remained below last year’s levels. The CPF has generated only $30 million for 2009 to date, compared with $50.4 million in 2008, a 40.5-percent decline, according to the press release. In 2009 there were 4150 transactions as September, compared to 5,444 transactions in 2008, a 23.8-percent decline.