Hempstead Town Board members on Thursday passed a 2017 budget that slashes spending by 3 percent and raises taxes by about $6 per household.
The $422.7 million budget, which passed unanimously, is $13.4 million below the town’s current budget of $436.1 million.
It includes a 1.8 percent increase in the tax levy — below the town’s state tax cap limit of 1.84 percent.
Town taxes for the owner of an average single-family home will be $726 under the new budget, not including special districts, county or school taxes.
Hempstead Town Supervisor Anthony Santino touted it as the first structurally balanced budget in more than three decades, with revenue equal to expenses.
Santino said savings were achieved through a reduction of $19.1 million in salary costs. The town accepted 57 early retirements or buyouts it offered in 2015, equaling $6.4 million in savings.
Overtime in 2016 was reduced by more than 40 percent, coming in at $2.5 million — below the town’s estimate of $4.3 million.
Part-time staffing also was reduced by 8.4 percent. The town expects to save $5.5 million by cutting part-timers’ hours by 38 percent.
Most town services should remain the same, town officials said, but every department was ordered to cut discretionary spending by 20 percent, which would save $9 million in 2017.
Unlike previous budgets that borrowed from town reserves, town officials said that reserves will not be used to balance this year’s budget and the town is seeking to instead add to those reserves. The town’s estimated spendable reserve fund at the end of 2016 is about $18 million.
The state comptroller recommends that towns have about 20 percent of expenditures on hand, which for Hempstead would equal $80 million.
Town officials said they plan to add $400,000 in reserves for next year’s budget. Officials are seeking to increase reserves to improve the town’s interest rates for future borrowing. The town borrows about $40 million to $50 million annually for infrastructure improvements.
Last year’s budget including borrowing of $22.9 million in reserves, but the town is projected to only spend about $10.9 million of that. The town had borrowed $25 million to balance the 2015 budget.
The town’s bond rating was downgraded in December by Moody’s Investors Service to Aa1 for “three years of structurally imbalanced operations which have led to deterioration in available fund balance.”