Tax Cap Even Lower

At a time when East Hampton Town residents have been demanding strict enforcement of the laws intended to stop illegal rentals and questionable business expansions, word has been received that the so-called 2-percent cap on how much the town may increase property taxes will be less than 1 percent next year unless a majority of the town board votes to pierce it.

The New York law designed to rein in property taxes limits tax increases to either 2 percent or the rate of inflation, whichever is less. According to information from the New York State comptroller Monday, the limit on how much municipalities may increase taxes next year will be .73 percent, compared to an allowed 1.56-percent increase for 2015.

Even as Town Supervisor Larry Cantwell, at a town board meeting Tuesday, said that efforts “to maintain and protect our community” will require “major resources” and “major funding,” he said the “tax cap formula for next year is going to be very limiting in terms of trying to provide services that are being demanded. The board will have to weigh how we are going to fund” public services, “especially in the area of enforcement and public safety.”

The permissible increase for next year would allow town taxes to rise by between $700,000 and $750,000, Len Bernard, the town’s budget officer, said on Tuesday. However, a “growth factor” calculation, based on increased property tax assessments in the town, and a tax increase allowance of $315,000 to be carried over from this year, will mean that a town tax increase for 2016 of about $1.1 million will be allowed, Mr. Bernard said. That amount shows a 35-percent decrease from 2015.

With a town budget of $71.5 million, and annual increases in the New York State Health Insurance Program through which the town covers employees, there is not a lot of wiggle room, the budget officer said. Next year’s health insurance increases are being estimated at between 6.4 and 8.6 percent. In addition, the town’s contracts with its labor unions require salary increases of 2 to 2.5 percent.

“Something seems inherently wrong with a system that produces these scenarios for local governments,” Supervisor Cantwell said in a press release yesterday. “At a time when our residents are looking for significant increases in our enforcement of local laws and more police and code enforcement staff to address quality-of-life issues in hamlets like Montauk and Springs, we are being told by the state that in order to do so, you may have to pierce the levy cap that is half what it was originally intended to be when the law was passed,” Mr. Cantwell said in the release. According to the state legislation, a town board can override the limit on the tax levy with the approval of three-fifths of its members. School districts, on the other hand, which are also affected by the cap, must obtain the approval of 60 percent of district voters to override the cap.

“I raise this issue because there are challenges to be faced in the upcoming budget,” Mr. Cantwell said at the town board meeting.