The Riverhead Board of Education increased the school district tax levy by more than half a million dollars during a special meeting this week, after a major Route 58 hotel property successfully challenged the Town of Riverhead’s tax assessment on its property earlier this year, reducing its school property tax obligations.
Browning Hotel Properties, which built and operates the Hilton Garden Inn and Residence Inn hotels on Route 58 with financial assistance from the Riverhead Industrial Development Agency, including real property tax exemptions, obtained a court order in June reducing its tax assessment by 26%.
MORE COVERAGE: Companies receiving IDA benefits look to grievance actions for further property tax reductions
The assessment determines the amount of payments in lieu of taxes owed by the hotel properties under a PILOT agreement with the Riverhead IDA. The school district tax levy was increased by the board from $103,789,722 to $104,311,496 — a hike of $521,774 — to make up for the reduced PILOT payments.
The school district’s tax levy for the 2022-23 school year was $102.7 million and was set to increase 1% under the budget adopted by the school board and approved by voters in May. Instead, the levy will increase roughly 1.57%. The school district’s budget for the current (2023-2024) school year is $192 million, a dramatic increase from last year’s $169.7 million budget.
“Unfortunately, in order to make up the funds, we have to increase the tax levy,” school board President Colin Palmer said during the meeting. “Something that we did not want to have to happen, but we unfortunately have to because of the position this court decision has put us into.”
As of June 30, eight other companies in Riverhead with Industrial Development Agency benefits had also filed notices challenging their assessments. Other large commercial properties in Riverhead without IDA benefits, including the Home Depot on Route 58, are also seeking reductions to their assessments through legal actions.
The special meeting Tuesday evening at the district office was called specifically to adopt the new tax levy before a state deadline at the end of the month requiring the levy to be finalized.
The school board also approved a $224,000 contract to repair the high school’s track and a contract extension with Suffolk Transportation Services for field trips and sports in the 2023-24 school year.
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