Modest Tax Increase Seen In East Hampton Budget

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By Stephen J. Kotz

East Hampton Town Supervisor Larry Cantwell this week released his tentative budget for 2017. The $75.1 million budget calls for a spending increase of $1,357,581, or 1.8 percent, but it remains below the state-mandated tax levy cap.

The lion’s share of the budget increase is required to cover rising health insurance premiums and contractual raises for town employees, Mr. Cantwell said on Wednesday.

The town board will begin to review the spending plan on October 11 before holding public hearings later in the month. A final budget must be adopted by November 20.

Town residents can expect to see their taxes rise by just under 1.1 percent, to an estimated $29.70 per $100 of assessed valuation. But those residents who live in East Hampton Village or in that part of Sag Harbor Village that lies in East Hampton Town will see a nearly 4 percent decline in taxes, to $11.25 per $100 of assessed valuation.

“A significant part of the budget is for the police department and highway department and neither village pays into those funds,” Mr. Cantwell said, in explaining the disparity between the two tax rates.

Mr. Cantwell said an estimated 7.5-percent rise in health insurance premiums would cost the town an additional $800,000, even though new employees now contribute between 15 and 20 percent to their health insurance costs. Salary increases for town employees will add another $755,000 in costs. Minor cuts elsewhere in the budget reduce the net spending increase to $1,357,581, Mr. Cantwell said.

But the state tax levy cap limits the increase in the total tax levy to just over $700,000. Mr. Cantwell said the town would increase its levy by only $679,797 and make up the difference through an estimated $465,340 increase in non-tax revenue as well as about $200,000 allocated from surplus funds.

The total tax levy will be $53.7 million, according to Supervisor Cantwell, with total non-tax revenues expected to reach $23.2 million in 2017. That includes an estimated $4.4 million in mortgage tax revenues, which Mr. Cantwell said was a conservative estimate of what the town expects to collect. The balance of those non-tax revenues comes from sources such as fees collected by the Building Department, Town Clerk’s office, the Planning Department, and other town departments as well as state and county aid, and utility taxes paid to the town.

“These numbers continue a trend in town budgeting over the last six years that has been exemplified by disciplined spending and efficiency in operations,” Mr. Cantwell said in his budget message.

Mr. Cantwell said his tentative budget allows for the hiring of one new laborer in the Highway Department. A number of part-time, seasonal positions are proposed, including beach and park attendants, who would be charged with collecting garbage, cleaning restrooms, and other duties, along with additional lifeguards at Montauk beaches.

Since the town’s fiscal crisis in 2008, during the administration of former Supervisor Bill McGintee, which saw the town rack up an estimated $30 million in deficits, the town has been slowly digging its way out of a hole. From 2014 to 2017, the town has reduced its total debt by about 21 percent, from $119.8 million to $94.4 million. Mr. Cantwell said the town is on pace to reduce that debt load to about $80 million in the next three years as it continues to retire more debt than it is taking on.

“We’ve come a long way in terms of our credit rating,” said Mr. Cantwell, who added the town’s Aa1 rating matches the highest it ever had, back in 2003, and is one stop below the highest rating, AAA. “We if continue to do a good job, a AAA rating in the future is likely.”

Mr. Cantwell noted the budget includes funding for a number of town-based nonprofits. New this year will be $10,000 for Meals on Wheels, which the supervisor said would otherwise have to cut back its services, and $4,500 for the i-Tri program.

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