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Oct 6, 2009 6:39 PMPublication: The East Hampton Press

East Hampton Town budget is up 4.6 percent; taxes up 10 percent

Oct 6, 2009 6:39 PM

Former East Hampton Town Supervisor Bill McGintee filed a $71.89 million preliminary town budget for 2010 on Wednesday, September 30, just a few days before resigning. The budget represents a 4.6-percent spending hike over last year’s $68.6 million budget. Under the proposed budget, the tax rate would increase by 10.2 percent to $31.94 per $100 of assessed valuation for residents outside East Hampton Village and by 8.9 percent to $15.34 per $100 of assessed valuation for village residents. The increased taxes come on the heels of an unprecedented 24-percent tax hike this year.

Mr. McGintee, who resigned on Monday in the wake of the town’s fiscal crisis, had told Town Board members he wanted to stay in office until he had completed his proposed 2010 budget.

The Town Board has scheduled a hearing for November 6 and plans to adopt a final budget on November 19. It is required to adopt the budget by November 20.

The budget includes $2.4 million for debt service on $15 million that the town received special permission from New York State to borrow to cover its operating deficits in 2007 and 2008. The budget also anticipates a $1.8 million decline in revenue. About $1.4 million of that decline is due to a more conservative prediction of mortgage tax revenue, to $2.6 million, next year. This year, the town anticipated $4 million in mortgage tax revenue.

Town Comptroller Janet Verneuille estimated in early September that due to a decline in mortgage tax receipts, the town would have to borrow $1.5 million through a revenue anticipation note at the end of this year in anticipation of January’s taxes.

The budget still calls for residents to buy new $25 beach stickers next year. When the town first introduced resident beach permit fees this year, there were howls of protest and there has been discussion about eliminating the fee next year.

The permit program brought in about $330,00, about $80,000 more than anticipated. Next year, the budget calls for $310,000 in revenue from beach stickers, but it also anticipates an $80,000 decline in revenue from beach driving permits. The town budgeted $100,000 for the beach driving permits this year but has taken in only $20,000.

Other areas of the revenue side of the budget have also been hit hard. The town Justice Court anticipated a $125,000 decline in fees from the $850,00 budgeted last year, but had only taken in a little more than $331,500 as of September of this year. The town also anticipates plummeting interest income on its investments.

Though the East Hampton Airport had reportedly taken in only $867,000 of its budgeted $3.1 million in revenue for 2009 by September 1, the town is budgeting an increase in airport revenue to $3.9 million in 2010.

Candidates who are running for town office this fall—two members of the current Town Board, along with Mr. McGintee, had not been seeking reelection—were quick to criticize the supervisor’s budget during the public comment section of a Town Board meeting on Friday, October 2, that Mr. McGintee did not attend.

The preliminary document points out that the adopted budget will include modifications for encumbrances from prior years and states that “actual amounts for 2008 and 2009 are preliminary and unaudited. The 2009 actual year-to-date numbers were not included if the Town Comptroller deemed them unreliable.”

Democratic Town Supervisor candidate Ben Zwirn said that he was particularly disturbed that the town did not have reliable numbers on which to base the 2010 budget. Mr. Zwirn also said that he was disappointed that the Town Board has not scheduled any public budget forums until after the November 3 election. He urged the board to hold public meetings on the budget in the evenings throughout October. The Democratic also chastised his Republican opponents for a financial action plan they released last week that relies initially on $13 million more in deficit financing, which would need to be approved by the New York State Legislature.

“Everybody knows that the legislature is not in session,” he said, adding that he believes the Republicans are offering voters false hope when the financing cannot be approved until next year. “Their plan calls for more borrowing, but it fails to address what the debt service will be.”

Republican Town Board candidate Dominick Stanzione, who was also at the meeting, said that the GOP plan was designed to avoid a one-time tax that could cost homeowners an average of $1,200 immediately. He said that the Republicans’ plan will cost the average taxpayer an additional $176 per year over 10 years, and that his slate would work to reduce spending to offset that increase.

“Two members of the State Legislature agree with us,” he said. State Assemblyman Fred W. Thiele Jr. and State Senator Ken LaValle both endorsed the Republicans this week.

Town Board member Pat Mansir said that she planned to call Mr. Thiele right away to discuss more deficit financing.

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The over-due audits have been the bane of Town budgets ever since the Dems took control of the Board -- I think the Wilkinson Team has fugured out the smoke screens and "politics" of it all and ANTICIPATES what is happening rather than ruminating on "How could this be?!?" or "This is someone else's fault". Reality, transparency, change. Let's see how Pat, Julia, Pete, Bill and (groan) Brad react to the proposal by Wilkinson, Dominick and Theresa. Zwirn's reaction will also be telling - if it ...more
By Board Watcher (532), East Hampton on Oct 3, 09 12:43 AM