Riverhead to hold hearing to pierce tax cap and adopt 2026 budget Thursday; questions about budget hearing notice go unanswered

Riverhead’s 2026 spending plan heads to a public hearing Thursday afternoon alongside a hearing on a local law to override New York’s 2% property tax levy limit — a pairing that underscores how fixed costs and stagnant revenues continue to collide in town finances. 

The tentative budget totals about $121.1 million across all funds, up year over year, with the General Fund at $69.1 million and a townwide tax-rate increase of 6.74% compared to 2025.

The General Fund tax levy would rise 8.69%; Highway is up 2.73%; Street Lighting is down slightly. The townwide tax rate jumps from $67.031 to $71.549 per $1,000, a 6.74% increase.

At the same time, required elements in the legal notice for the budget hearing were omitted from the town’s published notice. New York Town Law §108 requires the budget hearing notice to list the salaries of the town supervisor, council members, highway superintendent and town clerk. The law also requires the notice to tell residents where they can inspect the preliminary budget during clerk’s office hours. The notice published by the town references the tax-cap override and mentions “adoption of the 2026 preliminary budget,” but it does not include the inspection statement or the elected officials’ proposed salaries. The town attorney has not yet responded to questions emailed Monday about the notice’s sufficiency, other than to say he would look into it. The State Comptroller’s Office declined to comment.

What the numbers say

The General Fund appropriation increases to $69.1 million; estimated revenues are $15.0 million; the plan uses $1.25 million in General Fund balance and levies $52.86 million in property taxes.

Across all operating funds, the tentative plan appropriates $121.1 million, supported by $49.77 million in non-tax revenues and $5.99 million in appropriated fund balance, leaving a townwide levy of $65.34 million.

Those top-line figures reflect what town leaders have called a “bare-bones” approach: no broad service expansions, but recurring cost growth in personnel, benefits and operations that outpace allowable levy growth. Put simply, even standing still costs more — which is why the cap-override law is moving in tandem with the budget.

What’s changing that you’ll feel as a taxpayer 

• Tax-rate impact: Townwide rate from $67.031 → $71.549 per $1,000 assessed value (+6.74%).
• Levy pressure is concentrated in the General Fund: +8.69% year over year, driven by baseline costs rather than new programs.
• Use of fund balance is limited: The plan taps $1.25 million in General Fund balance — modest relative to the reported balances — leaving most of the adjustment to taxpayers.

A growing long-term burden

Riverhead’s financial challenges extend well beyond next year’s levy. The town’s 2024 audit shows it owes $132 million in retiree health benefits and roughly $22 million in pension liabilities combined. Those figures represent obligations the town must meet over time — costs that rise automatically each year and are largely outside local control.

These long-term costs reinforce what the supervisor describes as “fixed costs that alone pierce the cap,” illustrating that Riverhead’s tax-cap struggles aren’t merely annual budget-cycle issues but symptoms of structural fiscal pressure built into its benefit and retirement commitments.

Town budgets pierce 2% tax cap 8 times in 9 years

Riverhead Town budgets have pierced the state-mandated 2% tax levy limit in eight of the last nine years. The Town Board passed a local law to authorize piercing the cap, as required by state law, for the 2023, 2024 and 2025 fiscal years and proposes to do so again for 2026. It pierced the tax cap in 2018, 2019, 2020, and 2021 without realizing it — and without following the proper procedure by adopting a local law to authorize it — according to the town’s independent auditors.

Supervisor Tim Hubbard said during a candidate forum last month that the 2% property tax cap, which took effect in 2012, is “antiquated” and “no longer suits the needs of an economy in 2025.” It just does not. And I hear people saying, well, you know, you’re using excuses for raising the taxes.”

The public-notice problem

State law says the hearing must be noticed with time, place and purpose, must state that a copy of the preliminary budget is available in the Town Clerk’s office for public inspection during office hours, and must list proposed salaries of the members of the town board, including the supervisor, an elected highway superintendent and an elected town clerk. The town’s posted notice, while referencing the override and the budget “adoption,” does not include the inspection language or the salary list. The lack of these elements could prompt calls to adjourn and re-notice the hearing to ensure full compliance and public participation.

Why this matters — or does it?

The town’s failure to meet the meeting notice requirements carries no penalty or other consequence under the state statute, though any pay raises for the elected officials whose salaries are required to be listed in the notice may be at risk, should a lawsuit be filed challenging them.

The town can cure a defect in the notice, by adjourn­ing the hearing tomorrow and then properly re-noticing it for a later date.

By law, the town is required to adopt a budget on or before Nov. 20. If it fails to adopt a budget, the preliminary budget — on which the hearing is held — automatically becomes the adopted budget.

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Editor’s note: This preview will be updated if the town attorney or State Comptroller’s Office provides comment before the hearing.