Playground of the Rich and Famous Claims Poverty

The social calendar is still a whirl of glamorous lawn parties, wine tastings, gallery openings, beach get-togethers and gala benefits in the Hamptons, the summer playground outside New York City for the millionaire Learjet Set. But down at Town Hall, the local government could use a handout.

East Hampton, one of the main towns on the eastern end of Long Island that make up the Hamptons, is burdened with a deficit that could exceed $12 million. And that has become a rich source of irony, given the community's spectacular wealth and its concentration of Wall Street money-management talent.

"LEA$T HAMPTON IS GOING BROKE; GLAM TOWN $12M IN THE HOLE," screamed a recent New York Post headline.

Exactly how the town got into this mess is under investigation. The state comptroller is reviewing the books, and the district attorney has subpoenaed records.

Town Supervisor McGintee acknowledged making mistakes since taking office in 2004 but said he is also a victim of economic circumstances, including rising health care costs for employees and waning tax revenue because of the downturn in real estate.

"Everybody perceives East Hampton to be the home of the rich and famous," said McGintee, the target of a petition drive to remove him from office. "When the summer's over, it's just the same old town just like all these other towns."

While East Hampton is home to billionaires and celebrities such as financier Ronald Perelman, Alec Baldwin and Steven Spielberg, the Hamptons also have a large number of working-class people, many of them illegal immigrants, who mow the lawns, trim the hedges, clean the swimming pools, park the cars, serve the hors d'oeuvres, tidy up the mansions and do many of the other things that make life so enjoyable for the rich.

East Hampton — which includes such hamlets as Montauk and Amangansett and parts of Sag Harbor — has about 21,000 year-round residents, but its population can swell to 80,000 or 90,000 in the summer, when the haves and the have-mores show up.

"There really are two Hamptons," said McGintee's predecessor, Jay Schneiderman. "The disparity between rich and poor is probably unmatched anywhere in the world. You have the heads of multinational corporations, billionaires — but of the year-round population, half the work force are undocumented immigrants living below the poverty level."

The wealthy do pay huge property-tax bills. But East Hampton has also been very generous to residents of all income levels.

The town operates its own airport, where Learjets and helicopters shuttle the beautiful people to their playgrounds. East Hampton also spends $100,000 a year for a day-care program for working families and $710,000 annually for free YMCA membership for all the town's children. A theater group for the handicapped gets $30,000 a year, and there are nutrition and transportation programs for senior citizens.

The town replenishes its harbors with clams, oysters and scallops and recently bought $100,000 worth of beach rakes to keep the shoreline clean. In the fall, residents do not have to bag and dispose of their leaves themselves; the town lets homeowners rake them to the curb, where a giant vacuum truck sucks them up and hauls them away at a cost estimated by McGintee at $300,000 to $400,000 a year.

Over the years, town leaders have been reluctant to raise taxes, because that could harm the many working-class folks struggling to pay their bills, and hurt the politicians on Election Day, too. But now they may have to cut services and increase taxes after all.

"We need to explore all avenues of savings," McGintee said. "I don't mind providing the programs, but what the general public has to understand is that we don't manufacture money here."

A state lawmaker recently pushed through legislation giving the town a credit line of up to $15 million. But the money borrowed is going to have to be repaid somehow.

Much has the blame has fallen on McGintee.

"He's been spending more than he's taking in," said Bill Wilkinson, the former head of personnel for the Walt Disney Co. He lost to McGintee in last November's election after arguing the incumbent was ill-equipped to oversee a $70 million budget.

East Hampton resident Don Cirillo, who as former chairman of the National Federation of Municipal Analysts knows something about the topic, said: "Somebody was clearly not paying attention to the bottom line."