Sag Harbor proposes $600 annual tax increase for median village home

Sag Harbor has proposed a new budget that hikes village taxes by $600 for the median home, but officials are looking to scale back the increase before adopting a final plan.

Mayor Thomas Gardella's $18.4 million budget proposal would increase spending by 16% in the next year. It would raise the village tax levy from $9.2 million to $10.5 million, which would result in a tax hike of just under $600 for a home assessed at the median market value of $1.5 million, according to Alexandra Balserus, the village treasurer.

The current budget totals $15.9 million. The new fiscal year runs from June 1 through May 31, 2027.

Gardella said the village is imposing a hefty increase this time, but future ones would likely be smaller. He described the tentative plan as a “wish list.” The mayor and trustees have already begun identifying areas for cuts so the tax hike is smaller.

“We want to definitely set that rate to where we take that initial hit and then as we move forward, as the years go by, we can achieve where we want to be without having to go back to the taxpayer again for anything substantial,” Gardella said when he introduced the budget during a recent meeting.

The budget proposes using $582,487 in reserves to offset tax increases. But some officials said they are wary of dipping into the fund balance, arguing it could jeopardize the village's credit rating.

Officials have cited budget pressures common across the Island — increased costs for employees' salaries, retirement benefits and health insurance premiums. The budget also calls for adding two police officers, a traffic control officer, two ambulance workers and a building inspector — all full-time roles.

“I do think this is a much tighter budget than the village has had in years. And so the decisions we make around it, we got to be really careful about, because I think there is less cushion,” Deputy Mayor Ed Haye said.

Officials have outlined possible trims to the tentative spending plan. 

Among them is a proposed $150,000 cut for traffic mitigation measures. A study is underway but the village does not have a cost estimate for implementing potential recommendations, which could include rearranging crosswalks. Funding for improvements could come from outside grants or future budgets, officials said.

Officials also proposed trimming $30,000 from the $150,000 set aside for consultants who conduct environmental and traffic reviews required for large construction projects. Village officials said those costs have been underbudgeted in past years. Developers pay a portion of the expense.

The plan also includes $250,000 to replace aging equipment at the village’s sewage treatment plant. Officials have proposed steeper rents and fees for the sewer system, Balserus said. The village stopped raising rates during the COVID-19 pandemic, and incremental increases since then have not kept up with the cost of running the plant, Corish said.