Despite a projected revenue slump in 2025, R.T. Council looks to keep budget under tax cap

November 21, 2024 at 1:43 a.m.

When discussing the preliminary 2025 Town of Rye budget, Comptroller David Byrnes described its development as a “balancing act.”

“It’s always like that,” he admitted during a chat on Wednesday, Nov. 20. “But this year required a little discussion on how we were going to maintain that balance.”

The budget was presented to the Rye Town Council by Town Clerk Hope Vespia during a special meeting on Nov. 4. After some adjustments, it’s become closer to what will be presented for approval on Dec. 12.

“I’m not anticipating any drastic changes between now and then,” Byrnes said.

The Town anticipates adopting a $7.75 million spending plan for 2025, $250,000 more than the current year.

The increase represents a 3.3% hike, though the amount levied from taxpayers isn’t slated to reflect that—the amount collected from property taxes is projected to grow by $110,000, creating a 2.9% swelling.

The tax levy is the primary source of the $7.12 million projected revenue, which is $625,000 short of the Town’s proposed expenses.

“Our goal was to stay below the tax cap while still maintaining the majority of services our residents expect from us,” Town Supervisor Gary Zuckerman said. “We were able to do that through our reserve fund.”

The Town, this year, is working with a 3.2% tax levy cap.

The discrepancy between projected revenues and spending will be offset by dipping into the Town’s $4.6 million reserves that have been built up over the years.

The revenue shortage was exacerbated by changes in the flow outside the tax levy.

“We did see an increase in earnings from investments, but there were decreases in other areas,” Byrnes said. “Based on what we saw in 2024, we’re expecting less money coming from things like fines and mortgage tax.”

But the comptroller said he’s hopeful those numbers may increase in the coming year, which would minimize the amount needed from the reserve fund.

“That’s really where our balancing act comes into play,” Byrnes said. “Someone could argue that we could just use a larger part of our reserves to really bring down any tax increase. But if we see more delinquent taxpayers in the next year, then the Town would have to go out to borrow. And that’s an expense that wouldn’t have been budgeted.”

He recommended the Council instead allocate 12% of the reserve fund toward balancing the operating budget.

“I think it’s a good number for now. If we keep using that for the next seven years, it will drain it completely,” he said. “But it gives us the option to use it if we need it in the foreseeable future.”

Byrnes went on to explain that the spending increase is in large part due to personnel.

“The Council approved a 3% year-to-year increase as the standard raise,” he said. “But the supervisor, councilmembers and justices did not get any pay increases.”

However, Zuckerman said some positions received raises larger than 3%.

“Some personnel had their roles or responsibilities change over the last year because of some shifts over the last year,” he said. “But we also look to other communities to see what they pay in order to stay competitive. Like any private company, we need to ensure we’re able to retain the best employees with a competitive salary.”

On top of salaries, employee benefits saw a 17.6%, or $180,000, spike.

“Retirement and health benefit costs increased state-wide,” Byrnes said. “But we were able to mitigate that with adjustments elsewhere.”

Zuckerman said he expects few changes will be made to the budget before its adoption in December, but the Town is preparing for any scenario.

“We’re going to pass a law at the next meeting that would allow us to go over the tax cap, but I don’t believe we’ll need to,” he said. “I like to think of it as a prophylactic measure.”

The Rye Town Council opened a public hearing on the preliminary budget at their Thursday, Nov. 21 meeting at the Crawford Mansion Community Center.

Residents may email their thoughts on the 2025 budget to [email protected]

The public hearing will remain open until their Dec. 12 session, where the councilmembers are expected to vote on whether to approve the spending plan.