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East Hampton mayor says city faces $4M–$5.5M structural deficit and will seek grants, cuts to avoid layoffs
Summary
Mayor Salem Derby told E Media that East Hampton inherited a $4 million structural deficit that could grow to roughly $5–5.5 million; he said he will prioritize avoiding layoffs, pursue grants and use one‑time appropriations while considering an override only if necessary.
Mayor Salem Derby said East Hampton is confronting a multi‑million dollar structural budget shortfall and is looking across several tools to close the gap without laying off municipal employees.
"I inherited a $4 million structural deficit," Derby said, adding later that the shortfall could rise to "about $5.5 million." He told host Thomas Trout that department budget requests are in and that his immediate focus is "stop the bleeding and look towards next year" while preserving services.
Derby pointed to Massachusetts’ Proposition 2½ as a constraint on raising property tax revenue, noting the law limits levy increases to about 2.5% annually. That cap, he said, means revenue growth from new development and fees must substantially outpace the cap to erase structural gaps.
A major driver of the spending pressure, Derby said, is rising employee health‑insurance costs. He cited a roughly 40% increase 'from July' and an expected further 'about 12 and a half%' increase by June, and noted the city pays about 75% of employee premiums.
To close the gap, Derby listed options including targeted budget cuts that preserve services, shifting one‑time appropriations, pursuing grant funding and other creative revenue strategies. He said he is not seeking a tax override this year and emphasized a goal of avoiding layoffs.
Derby framed part of the response as regional advocacy: he described coordination with other mayors through the Mass Mayors Association to press state and legislative partners for support and policy changes.
The mayor said longer‑term solutions like single‑payer health care are policy goals he supports, but he presented immediate steps as fiscal triage and revenue‑diversification rather than an immediate policy change at the municipal level.
The administration did not provide a formal budget document or a detailed list of proposed cuts on the program; Derby said departments submitted budgets and that specific appropriations and grant parameters are still being worked through. The next budget‑season milestones (public hearings, votes) were not specified on the program.
The mayor said he will try to limit service impacts and avoid layoffs while considering an override in the future if needed.
