Understanding the relationship between coastal sea level and the variable ocean circulation is crucial for interpreting tide gauge records and projecting sea level rise. In this study, annual sea level records (adjusted for the inverted barometer effect) from tide gauges along the North American northeast coast over 1980-2010 are compared to a set of data-assimilating ocean reanalysis products as well as a global barotropic model solution forced with wind stress and barometric pressure. Correspondence between models and data depends strongly on model and location. At sites north of Cape Hatteras, the barotropic model shows as much (if not more) skill than ocean reanalyses, explaining about 50% of the variance in the adjusted annual tide gauge sea level records. Additional numerical experiments show that annual sea level changes along this coast from the barotropic model are driven by local wind stress over the continental shelf and slope. This result is interpreted in the light of a simple dynamic framework, wherein bottom friction balances surface wind stress in the alongshore direction and geostrophy holds in the across-shore direction. Results highlight the importance of barotropic dynamics on coastal sea level changes on interannual and decadal time scales; they also have implications for diagnosing the uncertainties in current ocean reanalyses, using tide gauge records to infer past changes in ocean circulation, and identifying the physical mechanisms responsible for projected future regional sea level rise.