The city manager introduced his 2026 budget proposal Wednesday night that would raise property taxes by 8.43 percent and surpass the state tax cap without adding any staffing to the work force.
The $54.5 million spending plan, presented by Interim City Manager Brian Shea to the City Council, represents a roughly $5.2 million increase over the current $49.3 million budget. The change would cost the average homeowner about $443 more per year — or roughly $37 each month — based on a home valued at $1.98 million.
No new staff positions are proposed for 2026, though Shea noted that prior budgets added personnel in the fire and police departments.
“The longer-term plan will provide for more staffing in each department in future years,” Shea said in his budget message. “Given the difficult circumstances of this budget year, there are no additional positions included in this proposed budget for any department.”
The higher tax rate, Shea explained, reflects soaring increases in employee compensation, health insurance, and pension obligations, which together make up about 71 percent of the city’s total expenses. Those personnel-related costs are projected to rise by $2.77 million, or 7.7 percent from 2025, including a 12.5 percent increase in health insurance premiums and a 17.4 percent jump in pension contributions, according to Shea.
The city’s property tax levy — the total amount to be raised through property taxes — is proposed at $33.9 million for 2026, up from $32.6 million last year. The budget increase exceeds the state’s property tax cap which, enacted in 2011, limits annual levy growth to 2 percent or the rate of inflation, whichever is lower.
For 2026, inflation is projected to once again outpace the cap.
The city is also still feeling the effects of a court ruling last year that restored Playland’s tax-exempt status, removing the amusement park from Rye’s tax rolls and lowering the city’s assessed value. The decision followed years of litigation between the city and Westchester County over whether the park should be taxed once a private operator, Standard Amusements, had taken over its management from the county.
Standard has since pulled out of its contract to manage the park.
“Due to the ongoing Playland tax matter and associated financial impacts, the City’s unassigned fund balance declined to 7.5% at the end of 2024 — below the policy requirement,” Shea said, adding that rebuilding reserves “remains a priority until we again exceed the required 10% threshold.”
The city’s unassigned fund balance, essentially its savings, remains below the 10 percent threshold, sitting at 8.5 percent of general fund expenses.
Photo Christian Falcone
Other notable expenditures would include $1.66 million in city support for The Rye Free Reading Room, a $236,000 increase from last year, to stabilize operations and reduce reliance on fundraising. The boost in city funding comes as the library faces a $171,000 operating gap that has forced it to rely more heavily on private donors to cover staffing, maintenance, and building repairs.
Funding for the Port Chester–Rye–Rye Brook EMS is proposed at just over $653,000 in the 2026 proposal, up roughly $111,000 from the current budget, as part of a five-year plan to bring pay in line for emergency services personnel.
The EMS also spends about $36,000 providing annual coverage of Playland, a cost Westchester County has been unwillling to cover.
The proposed budget also allocates $1 million toward vehicle replacement, $500,000 in state funding for stormwater improvements, and $1.5 million for road resurfacing — financed entirely through state grants rather than local tax dollars, according to Shea.
Another $400,000 is earmarked for sewer system maintenance and improvements to fulfill the city’s legal settlement with Save the Sound, budget documents show. The resolution stemmed from a 2015 federal lawsuit accusing Rye and other Westchester communities of allowing sewage leaks into the Long Island Sound in violation of the U.S. Clean Water Act.
The City Council will hold several workshops related to Shea’s budget this month. A public hearing on the budget is scheduled for early December, with an up or down vote expected at the council’s Dec. 17.
