Putnam Tax 'Timeout' Rejected

County legislators raise multiple concerns Call it a "pause" or a "timeout." Either way, a proposal to use Putnam's outsize surplus to reward residents and businesses by not levying county taxes in 2027 ran aground amid concerns about the benefits to large taxpayers like New York City and Rockland County's experience in the 1980s. Dan Birmingham, chair of the county Legislature, brought the idea to the Budget and Finance Committee on Wednesday (Sept. 23). It was the latest proposal to shift to taxpayers some of the estimated $163 million in unrestricted reserves that Putnam had accumulated as of the most recent audit in 2024. Initially calling the property-tax suspension a pause, Birmingham, who said he paid $800 in county taxes last year, offered to "reframe it" as "a tax-levy timeout." He expects the surplus to rise again once the 2025 audit is complete, and he called "meager" the $1 million reduction in the $45 million tax levy approved for the 2026 budget. "I don't think we should be drunken sailors; I don't think we should look at this lightly," said Birmingham. "But we should ask the question: Would I like $800 off my tax bill next year?" Spurred by a $50 million surplus, Rockland County approved a one-year tax holiday in 1987 — considered the first-ever in the state. John Grant, the county executive at the time, said that using $37.7 million of the surplus to eliminate a levy for 1988 would save the average taxpayer $410. Four years later, Grant announced he would be eliminating 276 positions, half of them vacant. "It was a disaster in Rockland County," said Legislator Amy Sayegh. She said Putnam's surplus allows it to pay cash for projects, rather than borrowing, and earns interest. "I don't want to grab more money from the taxpayer, but I want to safeguard what we have," said Sayegh. "I would support gradually lowering property taxes, but not pausing them for one year." New York City, described as Putnam's biggest taxpayer because of land it owns, would benefit, as would utility companies. Legally, they could not be excluded. "The concept that the City of New York, NYSEG [New York State Electric and Gas] and Verizon would also benefit from a pause is something that we just can't get around," said Legislator Tommy Regan. Nancy Montgomery, who represents Philipstown and part of Putnam Valley as the Legislature's sole Democrat, said she is a "big fan of services and programs," such as helping local fire departments and emergency medical personnel replace outdated equipment like stair chairs and turnout gear. Montgomery said she preferred extending and increasing the county's pause on collecting its portion of the gas tax and renewing an exemption from Putnam's sales tax on clothing and footwear costing less than $110 before it expires in March. (County Executive Kevin Byrne says he would like to make the exemption permanent.) "There are always great needs from the towns for emergency services equipment — fire trucks, ambulances," said Montgomery. "Those are the kinds of ways I prefer to give back." Earlier this month, the Legislature rescinded a 14-year-old policy letting the finance commissioner determine how surplus funds are allocated. Since the policy's adoption in 2012, Putnam's budget surplus swelled from $33.9 million to $191 million in 2024 because of "over-appropriation, underestimation of revenues [and] increased sales tax receipts and other revenues," according to the resolution. Last year, legislators approved setting aside $6 million of the surplus for taxpayer relief but have not settled on how to use the money. "Maybe this is the year where we can use that for particular town needs," said Montgomery. After the discussion, the Budget Committee approved a charter amendment that would allow five of the nine legislators, instead of a supermajority of six, to override a county executive's veto of their cuts or reductions to appropriations in a tentative budget. A supermajority would still be needed to overri...