East Hampton Town’s 2025 budget will pierce the state-mandated cap on tax-levy increases, Rebecca Hansen, the town administrator, told the town board at its Tuesday work session.
The just over $103.72 million preliminary budget that Ms. Hansen presented to the board in a 322-page document Tuesday brings the town’s projected expenses above $100 million for the first time, because of an over $8 million spending increase. Taxes would be raised 7.72 percent for residents outside East Hampton and Sag Harbor Villages even though the town announced in a town press release that, “a portion of fund surplus” is being used to keep the hike down. The town budget has increased over 20 percent since 2021.
“A lot of people are going to ask, ‘What has contributed to this increase?’ “ Ms. Hansen said before explaining that 62 percent of the expenses are related to salary increases, health insurance premium creep (health insurance accounts for over 50 percent of the town’s employee benefits cost), and pensions. Nonetheless, despite the generous pay and benefits packages, the town is still having difficulty attracting and retaining employees. New promotions, new positions, and a regrading of over 100 Civil Service Employee Association union members — all are playing a role in salary growth.
The town supervisor makes a base salary of $142,644 and each council member makes $89,965. Town justices bring in just over $100,000 each, all before health benefits and retirement.
Debt service accounts for 14 percent of the budget, and “other expenditures” another 24 percent.
“We looked at this as a transitional budget,” said Supervisor Kathee Burke-Gonzalez, “because this is the first budget that we’ve done since we renegotiated contracts with our three unions, C.S.E.A., P.B.A., and the S.O.A.” Town employees in the C.S.E.A. are now contracted to receive a 4-percent annual salary increase.
In September, the New York State comptroller announced that towns could increase their tax cap levy by 2 percent, barely enough for the town to meet its salary demands, said Ms. Hansen.
“Our allowable levy cap was just over $2.1 million. We are anticipating our two retirement systems to have an increase of over $2.5 million. Budgeted salaries from the 2024 adopted budget to the 2025 tentative is a cost of over $1.9 million,” she said. “How much more can we increase the rental registry?” she asked, in exasperation. Doubling the fee brought in an additional $100,000, but “having very limited areas that are non-tax revenues makes it difficult for any municipality to come up with anything other than a tax levy.”
Councilman David Lys said that increasing the fee structure for town services, like building permits and application fees, were one small way the town attempted to offset what it knew was coming, but that “our hands were a little forced this year.” Creating a paid parking system this summer in Montauk also helped and it could be expanded.
Further, the town is simply growing. “We also need to talk about the fact that if you look at the 2020 census, our year-round community has increased 32 percent in 10 years. We believe that’s an understatement,” said Supervisor Burke-Gonzalez. “The town owns 120 properties, we have 34 cemeteries, we have 21 comfort stations. All of those need to be provided for. We have hundreds of miles of roads, we have sanitation, the garbage and cardboard and recycling that’s been coming into sanitation has been off the charts since Covid. We need to address all that and support our staff and make sure they’re making a living wage. That is all built into this budget. This budget is trying to lift up our community, it’s a reflection of our values and priorities.”
Sanitation costs are projected at just over $4.34 million for the year, the Highway Department will spend close to $10 million, and the airport another $6.76 million plus. The costs to maintain and staff town beaches were expected to jump nearly 57 percent, to just over $1.4 million.
The budget will be a topic of discussion at the next two work sessions before a public hearing is scheduled. The New York State comptroller requires that the budget be adopted by Nov. 20.
