The Hempstead Town Board voted Wednesday to approve its $436 million preliminary 2016 budget, which doesn't increase property taxes but calls for borrowing $18.3 million in reserves.
The town's property tax levy of $269.6 million was frozen at the same rate as last year, Supervisor Kate Murray said. The tax rate will remain at zero under the town's 1.26 percent tax cap.
Residents are paying an average base tax of $720 per household that includes town tax, streetlight maintenance and garbage collection and pickup, which is down 2 percent from last year. Other taxes for services in special districts may increase or decrease depending on the community.
The town increased taxes in its general fund for next year, but it was offset by reduced taxes in other services, town comptroller Kevin Conroy said.
Residents should receive a state tax rebate this year even after the town raised taxes 3.3 percent, because the town remained under the state-mandated tax cap, Conroy said. The state tax rebate program ends next year, and residents could absorb any tax increase.
Some residents and opponents questioned the budget methods during Wednesday's hearing.
Democratic supervisor candidate Rita Kestenbaum questioned the town's use of reserves to meet operational needs.
The budget calls for using $18.3 million in reserves, or about 36 percent of the 2015 general fund of $49 million. The general fund is projected to be about $31 million at the end of 2016.
The town's 2015 general fund is projected to end the year with a $9.7 million deficit, but under the 2016 budget, the general fund is projected to end the year with a $600,000 surplus.
Kestenbaum pointed to the town's credit rating, which Standard & Poor's downgraded three levels in March, from AA+ to A+, for excessive borrowing from reserves. Hempstead Democrats said the reserves should be used only for emergency or catastrophic funding, not for year-to-year budgeting.
The town is also budgeting $7.2 million in next year's budget to meet a 2014 court judgment requiring tuition payments for Nassau Community College in Garden City and the Fashion Institute of Technology in Manhattan.
The board plans to pass a $17 million, 12-year bond next year after the budget is approved to cover the remaining payments.