East Hampton Taps Reserve Funds To Offset Impacts Of Pandemic And Stay Under Tax Cap

East Hampton Town Supervisor Peter Van Scoyoc.

East Hampton Town Supervisor Peter Van Scoyoc released his 2021 town operating budget on Wednesday — an $82.68 million spending plan that represents less than 1 percent in additional spending by the town and remains below the state-mandated tax cap despite large losses in county aid and the costs of the town’s response to the coronavirus pandemic.

The supervisor has proposed using nearly $2.8 million in reserve funds to help offset the losses in aid, unexpected expenses and new spending, while keeping tax increases in check.

As a result, the tentative budget, which will be the subject of a public hearing in November, would mean an approximately 2.3-percent tax increase for town residents, but a slight tax decrease for those living in incorporated villages, which do not share in the costs of the East Hampton Town Police Department and town Highway Department.

The budget accounts for the loss of some $500,000 in annual police and emergency services aid from Suffolk County, which is facing a multi-billion-dollar deficit because of the pandemic.

Mr. Van Scoyoc said this week that the budget would squeak in under the tax cap by only about $9,000 and would rely on significant use of surplus reserves to keep the tax increase in check.

The tax rate for town residents will be $32.21 per $100 of assessed value, which would represent an approximately $50 increase in the tax bill for a home with a market value of about $1.2 million, Mr. Van Scoyoc’s budget message says.

Residents of East Hampton Village or Sag Harbor Village will be taxed at $7.77 per $100 of assessed value, a decrease of just under 1 percent that would lower the tax bill of a $1.2 million house by a little less than $8.

Mr. Van Scoyoc said this week that the budget accounts for about $300,000 in additional costs from the town’s response to the pandemic and the need for expanded use of police and other enforcement officers to deal with social distancing protocols.

The budget also proposes adding four new positions to the town’s payroll: a full-time marine patrol officer, one new Code Enforcement officer, an IT specialist and an additional environmental analyst in the Natural Resources department. A currently part-time Fire Marshals office post would also be made full time, in Mr. Van Scoyoc’s proposal. The four new positions, along with salary hikes for other current employees, will boost payroll spending by about $530,000 annually, the supervisor’s explanation of the budget says.

The town, the supervisor says, is benefiting from its large reserves built up over the last decade to more than half of the annual budget. The reserves make it possible to offset new expenses with the $2.8 million budget boost. The town will still have a reserve of more than $40 million on hand, a balance that Mr. Van Scoyoc said should allow it to maintain its Aaa credit rating.

“We have over 50 percent of our budget in reserve, and that really pays off in a situation of crisis like this when we have these big unexpected expenses,” Mr. Van Scoyoc said.