East Hampton's 2025 Tentative Budget Would Pierce Tax Cap

Facing rising costs and limited opportunities to increase nontax revenue, East Hampton Town is expected to exceed the New York State tax levy cap in its 2025 budget, according to the tentative budget that was unveiled at the Town Board’s work session on Tuesday, October 1.

The proposed budget, detailed by Rebecca Hansen, the town administrator, foresees total spending of $103,722,303, an increase of $8,258,997 over the 2024 adopted budget, or 8.65 percent. For residents outside of the villages of East Hampton and Sag Harbor, the tax rate would increase by 7.72 percent. A property owner outside of the villages with a residence valued at $1.14 million would see an additional $104.28 on their 2025 tax bill.

The tentative budget “proposes to pierce the tax cap by levying a total amount of $65,882,620 for the four townwide funds,” Hansen said, noting that the state comptroller announced that property tax levy growth would be capped at 2 percent for 2025. “For the Town of East Hampton, that allowable cap amount was just over $2.1 million from the current fiscal year.”

The town, like many municipalities and school districts on Long Island and throughout the state, is confronting many factors that hinder its ability to keep spending down. Sixty-two percent of budgeted expenditures are related to salaries and benefits, Hansen said. “The town still encounters difficulties as we try to recruit and retain qualified employees” — due in part to the high cost of living, and particularly housing, in the town — “and most of the town employees within the 2025 fiscal year are due to receive a 4 percent contractual increase.”

In addition, the budget includes many personnel changes, among them new full-time positions, promotions, and merit pay and regrading for Civil Service Employees Association members. Health insurance premiums, Hansen said, have been budgeted with a 10 percent increase, which is by necessity an estimate based on current-year projections and the number of employees, as the town does not learn of rate increases until December, when by law the budget must be passed by November 20.

Retirement contributions are responsible for one of the largest increases in fiscal year 2025, Hansen said. The state has increased payroll contributions for the employee retirement system, which for many of the town’s employees goes from 15.2 percent to 16.5 percent of the total payroll. The pension contribution for police department employees will rise from 31.2 percent to 33.7 percent — “more than one-third of your entire police payroll is going to be your pension contribution,” Hansen told the board.

The budget increases expenditures for beach personnel, with $1.1 million allocated for lifeguard services. “Last year and this summer, the town undertook a major effort to recruit the most qualified staff that we could by offering competitive salary rates,” Hansen said. “This year, we were able to hire and maintain a full staff pretty much throughout the season.”

The town has raised fees for things like building permits and its rental registry, and in June added mobile app-based paid parking at three locations in Montauk. “If the town was only allowed to increase taxes by 2.1 percent, when that alone is just salary increases,” Hansen asked rhetorically, “how much more can we increase the rental registry permits? By doubling that fee, we did double the amount of revenue that comes in, but that was an additional $100,000. Having very limited areas that are nontax revenues makes it difficult for any municipality to come up with anything other than a tax levy.”

The Town Board views the tentative 2025 budget as “a transitional budget,” said Supervisor Kathee Burke-Gonzalez, as it is the first since contracts with the CSEA, Police Benevolent Association and Superior Officers Association were renegotiated. “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,” she said, adding that the figure likely understates the increase, as the census was conducted in April 2020, weeks after the COVID-induced lockdown. “We know from our roads, and just moving around town, how many year-round people are here.”

The town owns 120 properties, 34 cemeteries, 21 comfort stations and hundreds of miles of roads, and the Sanitation Department has absorbed “off the charts” volumes of trash and recyclables since the pandemic, the supervisor said. “We need to address all that,” while also ensuring that town staff make a living wage and supporting not-for-profit organizations like food pantries and child care and senior citizens services. “This budget is trying to lift up our community,” she said. “It’s a reflection of our values and our priorities.”

The budget will be refined in the coming weeks including at the board’s next two work sessions. “We will continue to have work session reviews until the board agrees on a final document, which will turn into your preliminary budget,” Hansen said. If the tax cap is to be pierced, which would require adoption of a local law by the Town Board, a public hearing on a preliminary budget should be scheduled for November 7, she suggested. Once the hearing is closed, the board could adopt the 2025 budget at its November 19 work session.