The town of Carmel's 2027 tentative budget stays within the state-imposed 2 percent tax levy cap and lowers the townwide tax rate, potentially providing modest savings for homeowners whose property assessments remain unchanged.
Town Comptroller Mary Ann Maxwell presented the Town Board with the budget highlights at its Oct. 7 meeting.
Under the proposed $38.6 million spending package, a homeowner with property assessed at approximately $542,780 would pay about $2,171 in annual town taxes, a decrease of $27 from the previous year, according to Maxwell.
However, Maxwell cautioned that a lower tax rate does not necessarily translate into a lower tax bill because property assessments continue to rise.
Maxwell explained the challenges of controlling expenses while maintaining municipal services amid inflation, rising labor and health insurance costs, and other economic pressures.
Supervisor Mike Cazzari said the town worked to keep spending under control without sacrificing essential services.
"Despite the continued effects of inflation and the significant increases in health care, labor, and operating costs, the town remains committed to responsible and disciplined fiscal management," Cazzari said in his written budget message.
The tentative budget calls for a townwide property tax levy (the total amount of revenue collected through property taxes) of approximately $28.6 million, with the overall levy increase for townwide and special districts totaling $1,050,445. That is approximately $1,100 below the state's maximum allowable increase of $1,051,506 (which is 2 percent).
The townwide tax rate would decrease approximately 1.15 percent from the previous year.
Maxwell explained that the town's total equalized assessed property value has climbed to approximately $7.15 billion, an increase of $342 million from the previous year. That expanding tax base helps reduce the tax rate, although individual homeowners may still see increases if their assessments rise.
The town's share is also only a portion of a homeowner's overall property tax bill.
For a typical taxpayer in the Mahopac School District, school taxes account for approximately 60 percent of the total bill, compared with 14.4 percent for town taxes. County taxes represent 8.2 percent, while water district charges account for approximately 9.6 percent.
Public safety remains the town's largest expenditure, accounting for approximately $15.2 million, or 39.3 percent of the budget. The category includes police services, traffic control, dog control and code enforcement.
Public safety spending would increase 5.6 percent, with the police budget totaling approximately $13.9 million, including lake patrol, community policing and the K-9 unit.
Police overtime funding would increase from $763,000 to $918,000, while salaries, benefits and pension contributions would continue to drive costs.
Purchases of police vehicles are not included in the operating budget and would instead be funded through capital sales tax revenue, subject to Town Board approval.
Other major expenditures include:
Highway and transportation: $10.3 million, an increase of 4.3 percent, including $1.7 million budgeted for snow removal.
General government: $7.6 million, an increase of 5.1 percent, reflecting higher employee benefits, insurance and staffing expenses.
Recreation and culture: $2.7 million, an increase of 2.2 percent, including additional funding for summer camp and senior programs.
Debt service and transfers: Approximately $2.3 million, supporting road resurfacing, drainage improvements, water infrastructure and other capital projects.
Maxwell said salaries and employee benefits account for approximately 77 percent of townwide expenditures.
Health insurance alone is expected to cost approximately $6.5 million, including retiree coverage. Maxwell budgeted for an 8 to 10 percent increase in premiums, although final rates have not yet been determined.
The town is also budgeting approximately $4 million for retirement contributions.
Despite the rising costs, the budget maintains the town's recreation and senior services. Summer playground camp funding would increase from $260,000 to $310,000, while the senior program would receive additional funding for a part-time position.
Property taxes provide approximately 74 percent of townwide revenue. Other sources include sales taxes, mortgage taxes, building permits, state aid and interest earnings.
The budget projects $800,000 in sales tax revenue and $1.425 million in mortgage tax revenue, the latter up substantially from the $975,000 that was budgeted for 2026.
Building permit revenue is projected at $826,000, while interest earnings are expected to reach $562,000.
The town also plans to use $285,000 from its fund balance, less than the $600,000 appropriated in the 2026 budget.
Maxwell said maintaining reserves is important after the town's fund balance declined from more than $16 million in 2024 to approximately $15 million at the end of 2025.
The reduction reflected several expenses, including a $1.1 million property purchase and unbudgeted police overtime.
Maxwell said Moody's expressed concern about the decline during a recent review of the town's finances. Nevertheless, Carmel retained its Aa1 bond rating, which helps determine its borrowing costs.
The tentative budget could undergo additional revisions before it is adopted.
Councilman Frank Lombardi said the board will continue reviewing the spending plan over the coming weeks, with an eye toward identifying possible reductions.
The board is expected to vote on the preliminary budget Oct. 21 and schedule a public hearing for Nov. 4, when residents will have an opportunity to comment before the final budget is adopted and sent to Albany.
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