East Hampton Budget Stays Below Tax Cap, But Supervisor Warns That May Not Be Sustainable

East Hampton Town Supervisor Peter Van Scoyoc unveiled his proposed budget for 2022, a spending plan that suggests $2.64 million in new spending, a 3.2-percent increase, to $85.32 million.

The budget will tap $2 million from the town’s robust reserves to offset taxes and will keep the town’s tax levy below the 2 percent state mandated cap — although Mr. Van Scoyoc warned that he sees no way for the town to continue remaining below the tax cap in the near future without new sources of non-tax revenue, like the idea of a resort tax that he has floated in recent months.

The supervisor said he foresees the need for the town to significantly increase the salaries it pays employees if it is to be able to fill its needs for services in the face of soaring housing costs and oppressive traffic congestion that make it difficult to get employees to either move to or commute to the town.

Salaries and benefits for the town’s 300-plus employees already make up more than 60 percent of the proposed 2022 budget, at some $51.5 million. And the supervisor nodded to the growing demands on town services, from police and code enforcement to garbage pick-up, and noted that the town struggled to keep up with the onslaught of demands by summer visitors this year.

“We see the landscape changing,” Mr. Van Scoyoc said in presenting the budget to the Town Board on Tuesday morning. “With the increase in the number of people who are living here year-round, that creates a greater demand for services, it’s becoming more and more difficult to present budgets and keep them beneath the 2-percent tax cap.

“So, I’m presenting an initial budget that is below the tax cap, but I would suggest that we can’t maintain this status quo and remain below the tax cap indefinitely without finding some other source of non-tax revenue,” he continued. “I think ultimately we will need to look at piercing the cap in order to be able to provide competitive wages for town employees and to provide the volume of services to the community.”

Other board members echoed the town’s need to increase salaries to make them competitive with other municipalities and industries considering the high hurdles of finding employees willing or able to work in East Hampton.

“We’ve had any number of people that we’ve tried to recruit who really fit the bill and came a long way with us, then decided that the salary wasn’t enough or the costs of living and finding housing was too much,” said Councilman Jeff Bragman, who is challenging Mr. Van Scoyoc for the supervisor post in the November election. “None of us would prefer to pierce the tax cap, but these quality of life issues seem to stepping to the forefront. Those quality of life complaints really matter. We’re on a tightrope right now.”

Mr. Van Scoyoc noted that the town lost 25 employees to retirement or resignations in 2021 and has been unable to re-fill many of those positions. The Town Police Department alone has been down as many as 11 officers from its typical staffing.

Of the $2.6 million in additional spending proposed for 2022, $1.3 million is due to increases in salaries and benefits, both contractual and merit-bases raises for non-union staff, according to Rebecca Hansen, the town’s budget officer.

The budget, as presented, would raise the tax rate between 2.6 percent and 4.4 percent. For residents who live outside the village, the tax rate would go up 2.6 percent, or 87 cents per $100 of assessed value. For the owner of a house assessed at $1.2 million, the hike would be an additional $60 on their town tax bill in 2022.

For residents of East Hampton Village, the 4.4-percent increase would tack on 53 cents per $100 of assessed value, a $37 annual increase for the owner of a house assessed at $1.2 million, Ms. Hansen said.