Hempstead town board plans to raise taxes by 12.1% in largest hike in years

The Hempstead town board plans to enact the town’s biggest tax hike in at least a decade on Tuesday with a 12.1% tax increase, piercing the state tax cap for the first time since it was put into place in 2011.

The town will hold afternoon and evening public hearings on busting the tax cap and on approving the 2025 budget on Tuesday. The budget proposal would increase the town’s tax levies from $346.8 million to $389 million, a $42.1 million increase and the largest tax hike in at least a decade.

The plan would increase town spending to $549.1 million, a 5% increase over the $522.5 million adopted 2024 budget. Town spending has continued to rise under Town Supervisor Donald X. Clavin, Jr. since he took office in 2020 and enacted his first budget in 2021 with a $453.5 million spending plan.

In a letter included in the budget proposal, Clavin called the tax hike a “modest positive adjustment to property-based revenues.”

Town spokesman Brian Devine said in an email last week that the town has “aggressively controlled costs that are within the Town’s discretion while employing cost-saving measures to offset the impact of increases in the costs of unfunded state-mandates.” Devine said a reduction in the town workforce, in the form of a retirement incentive offered earlier this year, would save taxpayers money.

While Clavin has touted a “tax freeze” since he took office, tax levies did rise slightly — by less than 1% — in 2021, 2023 and 2024, according to town records. Property tax levies fell by 0.29% in 2022, town records show.

With tax revenues staying essentially flat at the same time spending has grown, the town used federal pandemic relief, increased fees and drew down its reserves. In 2024 the town planned to use $56 million in reserves to balance its budget. It is unclear if reserves will be used in the 2025 budget. 

In April, Moody’s Investors Service, a Wall Street credit rating agency, warned Hempstead that it could see its Aaa bond rating downgraded if it continued to enact “structurally imbalanced budgets that rely on the use of reserves to support ongoing operations.”

The rating agency revised its credit outlook for the town from stable to negative, signaling that the rating could go down. 

“The town has relied on available reserves to balance budgets in recent years and has failed to implement either revenue enhancements or expenditure reductions, resulting in declining financial flexibility,” the report said.

Earlier this year the town board increased spending on salaries for elected officials, giving raises of up to 14% this year and making future raises automatic, based on inflation.

On the revenue side, the town use of stop arm cameras on buses is expected to bring in about $29 million in revenue annually. Devine said in an email that about $10.5 million of that will go to the vendor and $3.5 million to Nassau County to cover adjudication costs.

Democrat Kevan Abrahams, who is running against Councilman Chris Schneider, a Republican in a special election this year, criticized the tax hike.

“This is not a tax that’s necessary, it’s not warranted,” Abrahams said. “Town residents are struggling to be able to pay for their groceries, pay for gas at the pumps and be able to pay all the utility fees that exist in the town. This is not belt tightening, the town could do better.”