Long Island town, city pension budgets spike by nearly $14 million, Newsday analysis shows
A composite of various Town Halls along Long Island. Towns and cities are budgeting more for employees' pensions, citing changes to state law. Credit: Newsday/Illustration
Long Island’s towns and cities budgeted nearly $14 million more in 2025 than last year to fund employees' pensions — more than double the increase from 2023 to 2024 — as towns implemented tax increases across the region, a Newsday analysis found.
The year-to-year jump was far higher than the $5.8 million increase in pension budgets across the municipalities between 2023 and 2024, the data show. Long Island's 13 towns and two cities budgeted nearly $142.3 million for employees’ pensions in 2025, up from the $128.5 million budgeted in 2024.
In crafting their 2025 budgets, municipal officials said they were forced to scramble and budget more to prepare for what they described as an unknown expense.
The largest annual percentage increase was in East Hampton Town, where officials hiked the budget for pensions 31% between 2024 and 2025. Southold’s 20.1% increase was second-highest, followed by Brookhaven’s 17.1% jump.
Nine of 13 towns on Long Island pierced the state’s 2% tax cap in 2025, the limit on annual tax levy growth. Officials have cited the rising pension expense as a key factor behind the tax hikes. In some towns, the decision to raise taxes produced annual increases averaging hundreds of dollars per household.
Municipal officials said that by and large, they were responding to a change in the way the state calculates the pensions of Tier 6 employees, a cohort of municipal workers hired after April 1, 2012. Legislation in the 2024-2025 state budget allows Tier 6 employees' pension payouts to be calculated based on the average of their three highest salaries — a change from five. The revision gives extra weight to employees' highest salaries.
Backers of the changes said they were key to hiring and retaining public sector workers. The decision to calculate pensions based on five years for new employees had made it increasingly harder to hire public sector employees in recent years, leading to employee shortages across the state and spikes in overtime pay, supporters of the legislation have said. Public employee unions, including the United Federation of Teachers, argued the five-year calculation was unfair and lobbied hard in a campaign titled "Fix Tier 6."
Across the state, the changes are likely to cost school districts and local governments more than $377 million in 2025, according to state legislative documents, Newsday has reported.
Becky Hansen, East Hampton Town administrator and budget officer, said Tier 6 employees comprise half the salaries in the town's obligated pension payments.
“Downsizing the final average salary from five years to three years — those have real, long-term impacts for us,” Hansen said in an interview.
The expense will balloon over time, making it nearly impossible for governments to stay within the state’s 2% tax cap, she said. East Hampton pierced the tax cap in 2025 — by 9.2% — for the first time since the law took effect in 2012.
“If you want a local government to stay under the cap but you’re not providing any other kind of relief for us where we have to make contributions like this to the retirement system, you’re literally getting to the point where you’re counting paper clips, and that’s not how government should operate,” Hansen told Newsday.
But State Sen. Dean Murray (R-East Patchogue) defended the pension changes.
“What you find is we're already paying more because of Tier 6,” Murray said in an interview. "The difficulty we're having in hiring is due, in part, to the retirement packages that are now available. They're just not an incentive to come work in the public sector.”
Annual pension payouts for employees in the New York State and Local Retirement System averaged $39,479 in Nassau County, and $38,426 in Suffolk, as of March 31, 2024, according to the State Comptroller's Office. The retirement system includes town and city employees as well as other public sector workers, including employees of county government, fire, water and library districts.
There were 55,085 Tier 6 employees in Nassau and Suffolk Counties as of January, the State Comptroller's Office said.
The Towns of Hempstead and Brookhaven, Long Island's largest, hiked their pension budgets by the greatest amounts for 2025.
In Hempstead Town, the budget for employees’ pensions rose $2.1 million between 2024 and 2025. A year earlier, the increase was $100,000, town data show.
Brookhaven’s pension budget rose $2 million from 2024 to 2025, double the $1 million jump from 2023 to 2024, town officials said. East Hampton’s pension budget rose by nearly $1.9 million in 2025, almost triple the $671,622 increase from the year before, data show.
“When the state makes changes to [health] contributions and pension contributions ... you don’t get much discussion down to the town level,” Brookhaven Supervisor Dan Panico told Newsday in an interview. “We just get the bill.”
Those increases can make it difficult to stay within the state's tax cap, town officials said. In November, Brookhaven approved a $361.2 million budget for 2025 that pierced the cap for the first time. Town taxes on the average home are expected to rise $216 in 2025, Newsday has reported.
Babylon Town Supervisor Richard Schaffer said rising pension and health care costs led the town to eliminate some positions after the recent retirement of 26 employees. The town filled some vacancies with lower-salaried, entry-level workers.
Schaffer, who heads the Suffolk County Supervisors Association, said his counterparts recognize that tax increases can't be the only response.
If the pension expense continues to rise, Schaffer said in an interview: “It will eventually mean that there might have to be a review of things where certain fees are increased to cover the cost of a service, which obviously no one wants to do, or not have as quick a response time on certain things because of not filling positions." He added, “You can’t just continue to bust the tax cap, and we’ve said that to the state.”
Oyster Bay’s $1.1 million hike to the pension budget followed a year in which town officials had lowered that budget — by $63,000.
The Town of Islip budgeted $8.7 million for employee pensions in 2023, and hiked that budget by more than $261,000 in 2024, bringing the total to about $8.9 million, town data show. For 2025, the increase was nearly triple the prior year's — about $737,000 more.
Officials in Islip said it was too soon to say what measures the town will take. "We’re reevaluating everything and will know better how it will impact our budget going forward after a complete reevaluation," Islip Comptroller Joseph Ludwig said in a statement.
The Cities of Glen Cove and Long Beach raised their pension budgets, also after a year in which the cities devoted less to that expense. From 2023 to 2024, Glen Cove reduced its pension budget by $211,555 while Long Beach allocated $152,399 less for retirement benefits.
But for 2025, the cities boosted their spending on employees' pensions. The figure rose $575,618 in Glen Cove and $980,405 in Long Beach.
Glen Cove Controller Mike Piccirillo said the city "has consistently found new revenue streams" to cope with unexpected expenses. In January, the city raised fees for building permits.
"As we consistently reevaluate, we find these opportunities to cover these costs," Piccirillo said in an interview. "With the Tier 6 increases happening and going forward over the next several years, we'll be looking at the same type of initiatives as we prepare our budgets."
John Charon, Glen Cove's personnel officer, said outside competition from the private sector is a factor.
"Health insurance and other benefits around government employment is still, I think, outpacing the private sector," Charon said.
Municipalities' pension contribution rates rose from 15.2% to 16.5% in the 2025-26 fiscal year for workers in the Employees' Retirement System, the State Comptroller's Office said in September. For employees in the Police and Fire Retirement System, the municipalities' rate rose from 31.2% to 33.7%. The State Comptroller's Office attributed the increases to several factors, including Tier 6 revisions, inflation and salary growth.
Rebecca Dangoor, a spokeswoman for the State Comptroller's Office, said changes to Tier 6 negotiated by state legislators and the governor “will have costs that will be borne by employers.”
“Many factors impact employers’ annual pension costs, including the benefits offered in the retirement plans they adopt and the salaries they pay,” Dangoor said in a statement. “We're trying to maintain stable employer contribution rates and ensure the system continues to be well-funded.”
On the East End, where the towns oversee police forces, officials are also contending with the increases.
East Hampton's pension budget was $5.3 million in 2023 and $6 million in 2024. But the 2025 pension budget reflected a $1.8 million bump. To address cost increases, the town has introduced and hiked some fees, said Hansen, the town's administrator and budget director. She cited fees in the building department, and for special events and sanitation services as recent examples.
Southampton Town budgeted $8.5 million for employee pensions in 2023 and raised the allocation by $314,000 in 2024. But for 2025, the town budgeted about $1.1 million more for employee pensions.
Dorota Godlewski, the Southampton Town comptroller, said the municipality has struggled to hire and retain employees. "Hopefully changes to Tier 6 retirement will make that easier," she said. Godlewski said the town works during the budgeting process "to set aside enough funds for the annual contribution and make every effort not to exceed the tax cap."
Lt. Daniel Toia, president of the East Hampton Town Police Superior Officers Association, said recruitment on the East End has been a long-running challenge. It's difficult to attract employees given the far commute for those who don't live on the East End, plus a lack of affordable housing in the region.
But it's too soon to tell whether the changes will make a difference, he said.
"Just because you give a slight boost to the pension doesn't mean that they're necessarily going to drop everything and come and work for us," Toia said in an interview.
The changes apply to employees who retire after April 1, 2024 — if they are a member of the police and fire retirement system — and April 20 for those in the state's Employees' Retirement System, according to the State Comptroller's Office.
Murray, who supported the legislation in the State Senate, said the new law could save taxpayers money. Towns may be paying overtime to cover staffing shortages, leading to increases in other areas of the budget, he said.
Overtime pay within Long Island's town and city governments totaled $44.3 million in 2023, a slight uptick over 2022, when the figure was $44.1 million, a Newsday analysis found.
“My argument is, in the long run, I think this could either break even or save us money,” Murray said of the Tier 6 changes.
During last year's budget negotiations, some government watchdog groups vociferously opposed Tier 6 updates.
Ken Girardin, research director at the Empire Center for Public Policy in Albany, said in a statement that state legislators had "retroactively sweetened pension benefits for public employees.”
“State lawmakers in both parties have repeatedly shown that when they're asked to choose between demands from public employee unions and the public interest, they'll side with the unions, and this was just the latest expensive example of that,” Girardin said.
Changes to Tier 6 are sure to put pressure on local governments’ finances, said Patrick Orecki, director of state studies at the Citizens Budget Commission, a Manhattan think tank that analyzes state finances.
The expense to local governments is expected to double by 2040, Orecki said in an interview. “It’s a real and new cost, and it’s why we think further changes to the system shouldn’t be made.”
Orecki said he is skeptical whether the changes will help with hiring as well as lowering the expense of overtime.
“The question is whether changing a final average salary calculation from five years to three years is going to be the thing that changes your employment and recruitment and retention landscape, and I would say, no, that’s not the thing that’s going to push people in or out of a public job,” he said.
Ludwig, the Islip Town comptroller, said while he understands the rationale for the legislation, drawing a budget on Long Island increasingly has become a high-wire act.
"I'm absolutely frustrated because it just made my job that much harder in a world of tax cap issues, and people running for election," Ludwig said in an interview. "There’s a much harder balancing act that I, as the comptroller, have to do.”
With Denise M. Bonilla, Keshia Clukey, Sam Kmack, Brianne Ledda, Carl MacGowan, Deborah S. Morris, Joshua Needelman, Ted Phillips, Jean-Paul Salamanca, Tara Smith and Joe Werkmeister
Long Island’s towns and cities budgeted nearly $14 million more in 2025 than last year to fund employees' pensions — more than double the increase from 2023 to 2024 — as towns implemented tax increases across the region, a Newsday analysis found.
The year-to-year jump was far higher than the $5.8 million increase in pension budgets across the municipalities between 2023 and 2024, the data show. Long Island's 13 towns and two cities budgeted nearly $142.3 million for employees’ pensions in 2025, up from the $128.5 million budgeted in 2024.
In crafting their 2025 budgets, municipal officials said they were forced to scramble and budget more to prepare for what they described as an unknown expense.
The largest annual percentage increase was in East Hampton Town, where officials hiked the budget for pensions 31% between 2024 and 2025. Southold’s 20.1% increase was second-highest, followed by Brookhaven’s 17.1% jump.
WHAT NEWSDAY FOUND
Long Island’s 13 towns and two cities budgeted nearly $14 million more for employees' pensions than last year, more than double the increase from 2023 to 2024, a Newsday analysis found.
- The New York State Legislature last year approved changes to the way employees' pensions are calculated. The salaries of employees in Tier 6 — those hired after April 2012 — will be calculated based on the average of their three highest salaries, down from five.
- Town officials have cited the pension issue as a reason for piercing the state's 2% tax cap in 2025.
Nine of 13 towns on Long Island pierced the state’s 2% tax cap in 2025, the limit on annual tax levy growth. Officials have cited the rising pension expense as a key factor behind the tax hikes. In some towns, the decision to raise taxes produced annual increases averaging hundreds of dollars per household.
Municipal officials said that by and large, they were responding to a change in the way the state calculates the pensions of Tier 6 employees, a cohort of municipal workers hired after April 1, 2012. Legislation in the 2024-2025 state budget allows Tier 6 employees' pension payouts to be calculated based on the average of their three highest salaries — a change from five. The revision gives extra weight to employees' highest salaries.
Backers of the changes said they were key to hiring and retaining public sector workers. The decision to calculate pensions based on five years for new employees had made it increasingly harder to hire public sector employees in recent years, leading to employee shortages across the state and spikes in overtime pay, supporters of the legislation have said. Public employee unions, including the United Federation of Teachers, argued the five-year calculation was unfair and lobbied hard in a campaign titled "Fix Tier 6."
Across the state, the changes are likely to cost school districts and local governments more than $377 million in 2025, according to state legislative documents, Newsday has reported.
Becky Hansen, East Hampton Town administrator and budget officer, said Tier 6 employees comprise half the salaries in the town's obligated pension payments.
“Downsizing the final average salary from five years to three years — those have real, long-term impacts for us,” Hansen said in an interview.
The expense will balloon over time, making it nearly impossible for governments to stay within the state’s 2% tax cap, she said. East Hampton pierced the tax cap in 2025 — by 9.2% — for the first time since the law took effect in 2012.
“If you want a local government to stay under the cap but you’re not providing any other kind of relief for us where we have to make contributions like this to the retirement system, you’re literally getting to the point where you’re counting paper clips, and that’s not how government should operate,” Hansen told Newsday.
But State Sen. Dean Murray (R-East Patchogue) defended the pension changes.
“What you find is we're already paying more because of Tier 6,” Murray said in an interview. "The difficulty we're having in hiring is due, in part, to the retirement packages that are now available. They're just not an incentive to come work in the public sector.”
Annual pension payouts for employees in the New York State and Local Retirement System averaged $39,479 in Nassau County, and $38,426 in Suffolk, as of March 31, 2024, according to the State Comptroller's Office. The retirement system includes town and city employees as well as other public sector workers, including employees of county government, fire, water and library districts.
There were 55,085 Tier 6 employees in Nassau and Suffolk Counties as of January, the State Comptroller's Office said.
Largest hikes
The Towns of Hempstead and Brookhaven, Long Island's largest, hiked their pension budgets by the greatest amounts for 2025.
In Hempstead Town, the budget for employees’ pensions rose $2.1 million between 2024 and 2025. A year earlier, the increase was $100,000, town data show.
Brookhaven’s pension budget rose $2 million from 2024 to 2025, double the $1 million jump from 2023 to 2024, town officials said. East Hampton’s pension budget rose by nearly $1.9 million in 2025, almost triple the $671,622 increase from the year before, data show.
“When the state makes changes to [health] contributions and pension contributions ... you don’t get much discussion down to the town level,” Brookhaven Supervisor Dan Panico told Newsday in an interview. “We just get the bill.”
Those increases can make it difficult to stay within the state's tax cap, town officials said. In November, Brookhaven approved a $361.2 million budget for 2025 that pierced the cap for the first time. Town taxes on the average home are expected to rise $216 in 2025, Newsday has reported.
Babylon Town Supervisor Richard Schaffer said rising pension and health care costs led the town to eliminate some positions after the recent retirement of 26 employees. The town filled some vacancies with lower-salaried, entry-level workers.
Schaffer, who heads the Suffolk County Supervisors Association, said his counterparts recognize that tax increases can't be the only response.
If the pension expense continues to rise, Schaffer said in an interview: “It will eventually mean that there might have to be a review of things where certain fees are increased to cover the cost of a service, which obviously no one wants to do, or not have as quick a response time on certain things because of not filling positions." He added, “You can’t just continue to bust the tax cap, and we’ve said that to the state.”
Oyster Bay’s $1.1 million hike to the pension budget followed a year in which town officials had lowered that budget — by $63,000.
The Town of Islip budgeted $8.7 million for employee pensions in 2023, and hiked that budget by more than $261,000 in 2024, bringing the total to about $8.9 million, town data show. For 2025, the increase was nearly triple the prior year's — about $737,000 more.
Officials in Islip said it was too soon to say what measures the town will take. "We’re reevaluating everything and will know better how it will impact our budget going forward after a complete reevaluation," Islip Comptroller Joseph Ludwig said in a statement.
Cities
The Cities of Glen Cove and Long Beach raised their pension budgets, also after a year in which the cities devoted less to that expense. From 2023 to 2024, Glen Cove reduced its pension budget by $211,555 while Long Beach allocated $152,399 less for retirement benefits.
But for 2025, the cities boosted their spending on employees' pensions. The figure rose $575,618 in Glen Cove and $980,405 in Long Beach.
Glen Cove Controller Mike Piccirillo said the city "has consistently found new revenue streams" to cope with unexpected expenses. In January, the city raised fees for building permits.
"As we consistently reevaluate, we find these opportunities to cover these costs," Piccirillo said in an interview. "With the Tier 6 increases happening and going forward over the next several years, we'll be looking at the same type of initiatives as we prepare our budgets."
John Charon, Glen Cove's personnel officer, said outside competition from the private sector is a factor.
"Health insurance and other benefits around government employment is still, I think, outpacing the private sector," Charon said.
Municipalities' pension contribution rates rose from 15.2% to 16.5% in the 2025-26 fiscal year for workers in the Employees' Retirement System, the State Comptroller's Office said in September. For employees in the Police and Fire Retirement System, the municipalities' rate rose from 31.2% to 33.7%. The State Comptroller's Office attributed the increases to several factors, including Tier 6 revisions, inflation and salary growth.
Rebecca Dangoor, a spokeswoman for the State Comptroller's Office, said changes to Tier 6 negotiated by state legislators and the governor “will have costs that will be borne by employers.”
“Many factors impact employers’ annual pension costs, including the benefits offered in the retirement plans they adopt and the salaries they pay,” Dangoor said in a statement. “We're trying to maintain stable employer contribution rates and ensure the system continues to be well-funded.”
East End
On the East End, where the towns oversee police forces, officials are also contending with the increases.
East Hampton's pension budget was $5.3 million in 2023 and $6 million in 2024. But the 2025 pension budget reflected a $1.8 million bump. To address cost increases, the town has introduced and hiked some fees, said Hansen, the town's administrator and budget director. She cited fees in the building department, and for special events and sanitation services as recent examples.
Southampton Town budgeted $8.5 million for employee pensions in 2023 and raised the allocation by $314,000 in 2024. But for 2025, the town budgeted about $1.1 million more for employee pensions.
Dorota Godlewski, the Southampton Town comptroller, said the municipality has struggled to hire and retain employees. "Hopefully changes to Tier 6 retirement will make that easier," she said. Godlewski said the town works during the budgeting process "to set aside enough funds for the annual contribution and make every effort not to exceed the tax cap."
Lt. Daniel Toia, president of the East Hampton Town Police Superior Officers Association, said recruitment on the East End has been a long-running challenge. It's difficult to attract employees given the far commute for those who don't live on the East End, plus a lack of affordable housing in the region.
But it's too soon to tell whether the changes will make a difference, he said.
"Just because you give a slight boost to the pension doesn't mean that they're necessarily going to drop everything and come and work for us," Toia said in an interview.
Legislative debate
The changes apply to employees who retire after April 1, 2024 — if they are a member of the police and fire retirement system — and April 20 for those in the state's Employees' Retirement System, according to the State Comptroller's Office.
Murray, who supported the legislation in the State Senate, said the new law could save taxpayers money. Towns may be paying overtime to cover staffing shortages, leading to increases in other areas of the budget, he said.
Overtime pay within Long Island's town and city governments totaled $44.3 million in 2023, a slight uptick over 2022, when the figure was $44.1 million, a Newsday analysis found.
“My argument is, in the long run, I think this could either break even or save us money,” Murray said of the Tier 6 changes.
During last year's budget negotiations, some government watchdog groups vociferously opposed Tier 6 updates.
Ken Girardin, research director at the Empire Center for Public Policy in Albany, said in a statement that state legislators had "retroactively sweetened pension benefits for public employees.”
“State lawmakers in both parties have repeatedly shown that when they're asked to choose between demands from public employee unions and the public interest, they'll side with the unions, and this was just the latest expensive example of that,” Girardin said.
'Balancing act'
Changes to Tier 6 are sure to put pressure on local governments’ finances, said Patrick Orecki, director of state studies at the Citizens Budget Commission, a Manhattan think tank that analyzes state finances.
The expense to local governments is expected to double by 2040, Orecki said in an interview. “It’s a real and new cost, and it’s why we think further changes to the system shouldn’t be made.”
Orecki said he is skeptical whether the changes will help with hiring as well as lowering the expense of overtime.
“The question is whether changing a final average salary calculation from five years to three years is going to be the thing that changes your employment and recruitment and retention landscape, and I would say, no, that’s not the thing that’s going to push people in or out of a public job,” he said.
Ludwig, the Islip Town comptroller, said while he understands the rationale for the legislation, drawing a budget on Long Island increasingly has become a high-wire act.
"I'm absolutely frustrated because it just made my job that much harder in a world of tax cap issues, and people running for election," Ludwig said in an interview. "There’s a much harder balancing act that I, as the comptroller, have to do.”
With Denise M. Bonilla, Keshia Clukey, Sam Kmack, Brianne Ledda, Carl MacGowan, Deborah S. Morris, Joshua Needelman, Ted Phillips, Jean-Paul Salamanca, Tara Smith and Joe Werkmeister
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