The New York State Legislature gave its final approval Thursday to a measure directing to compensate its Community Preservation Fund for overpayments made to school districts, collectively saving the school districts $664,647.
Without the legislation, school districts would have had to give back the money, which came in the form of payments in lieu of taxes, or PILOTs. The overpayments were made in 2008 and 2009 and discovered by a state audit of the CPF in 2010, according to the office of state Assemblyman Fred W. Thiele Jr., I-Sag Harbor, who sponsored the bill. His counterpart in the state Senate, Sen. Kenneth P. LaValle, R-Port Jefferson, presented the legislation in the upper house.
PILOTs were designed to shore up the budgets of taxing districts that lost out on property tax revenue when the town preserved land using the CPF, thus taking the lands off the tax rolls. CPF money is used for the payments.
“In 2008 and 2009, the town clearly diverted monies to PILOT payments that should have gone to buy land,” Thiele was quoted as saying in a statement from his office. “The mistake was made by the town, not the districts. This legislation correctly holds the districts harmless and requires the town to make the CPF whole. The town has agreed to do so and this legislation provides them with the legal mechanism to accomplish this goal. This legislation maintains the integrity of the CPF while at the same time protecting school district taxpayers from unwarranted property tax increases that would result if the school districts were required to return the overpayments.”
The town may repay the CPF by transferring money from its general fund or capital fund, or by purchasing land appraised at $664,647 or more and dedicating it to the CPF.
Additionally, the bill identifies which taxing districts are eligible for PILOTs: Riverhead School District, Hampton Bays School District, Eastport-South Manor School District, Riverhead Fire District, Flanders Fire District, Flanders-Northampton Ambulance District and the North End Quogue Fire Protection District.
The legislation requires annual assessments of the CPF properties considered in PILOT calculations and that the town board adopt an annual plan before issuing payments.
“These additional amendments will provide greater transparency to the public with regard to PILOT payments and will insure that future payments will be accurate,” Thiele said.