Hempstead proposes a budget for next year that reduces overall spending and stays within tax cap

The Town of Hempstead will increase taxes by 3.3 percent in next year's budget, but town officials expect it to be offset for residents by a state tax rebate.

The town on Tuesday filed its tentative 2015 budget of $431.8 million, which, if approved, would reduce overall spending by $100,000. The budget does not exceed the town's 3.2 percent tax cap.

The proposed tax increase comes after three-straight years of tax levy reductions, from $263.7 million in 2011 to $261 million in 2014.

Officials were forced to trim spending, though still maintaining services, due to a loss in sales tax revenue and mortgage recording taxes, Town Comptroller Kevin Conroy said in an interview. Residents will likely not have to pay more in property taxes next year due to the state rebate program, Conroy said. Those making under $500,000 each year would receive tax credit checks from the state to offset any town tax increase, officials said.

"Just as families continue to tighten their belts during a difficult national economy, this budget actually reduces expenditures over the 2014 spending plan," Town Supervisor Kate Murray said in the proposed budget.

Conroy said the tax increase was needed this year to compensate for a 9 percent drop in sales tax and a 14 percent reduction in mortgage recording taxes. The revenue loss may be related to an economic downturn in Hempstead and a slower pace of rebuilding after superstorm Sandy, he said.

"After Sandy, there was a resurgence in the economy due to the replacement of cars and home improvements. Now that's gone away," Conroy said. "Had the mortgage and sales tax remained at its current level, we would not need a tax increase."

To cut costs, the town offered a series of buyouts in February to 72 employees.

The buyouts allowed the town to reduce pension payments and save $8.1 million in future medical expenses. Current town salaries total $178 million, which is down $1.1 million from last year.

Departments are working with leaner budgets and town workers are scheduled in shifts to avoid overtime, town spokesman Mike Deery said in an interview.

The town also added a fuel management system and is closely monitoring vehicle usage. The town has a larger vehicle fleet than four states, Deery said.

The town is expected to save money by switching to fiber-optic phone lines and replacing street lamps to LED lights. By installing LED lights next year, the town could see savings of $3 million annually, officials said.

The next town board meeting meeting?-nm on the budget is Oct. 7.