The board of trustees of a village which has had or may hereafter have its boundaries extended when authorized by a majority vote of the electors thereof at a referendum duly called therein, in behalf of said village, may by contract with the town or towns in which said village lies agree to assume and pay that part of the town taxes to be levied in future years by such town or towns to pay principal and interest of obligations sold to improve and pave highways in said town or towns which taxes will, when levied, become a lien upon property in territory annexed to said village, and to the extent contracted for, the said taxes shall be collectible by the town or towns from said village and become a general village charge, and when said village shall have paid such part of said town taxes the property in the annexed territory subject to such levy shall be relieved from paying the part thereof paid by said village.
New York Legal Code