Members of Albany's Common Council grilled the mayor's budget team over steep proposed tax increases, a budget report that contained accounting errors and contingency plans at a Finance Committee meeting Tuesday night.
The meeting was the Common Council's first chance to ask questions about a tough budget meant to respond to a tough financial situation facing the city. Mayor Dorcey Applyrs' $257 million budget proposal includes a 15% property tax levy increase, a 0.5% sales tax increase, new fees, and $9.1 million of cuts. The budget is also being supported by $20 million in additional state aid for 2027, and another $20 million for 2028.
At least nine of the Common Council's 15 members need to vote to override the tax cap to approve that 15% property tax levy increase. At one point during the meeting, Councilmember Alfredo Balarin said that would be "very hard."
The city has until Nov. 30 to approve a budget.
After a presentation by the Applyrs' budget team, members of the Common Council's Finance Committee quickly pointed out that the budget proposal published Thursday contained accounting errors, illegal cuts and an inaccurate expenditure total.
"I'm struggling to understand how the administration believes the council can properly prepare for a meeting, especially given that we all work full time during the day and have other obligations," Finance Committee Chair and Councilmember Meghan Keegan said. "How can we prepare to ask serious questions in a budget year where the council is also being asked to authorize a 15% property tax increase without accurate information in advance of the meeting?"
Budget Office staff told the council the errors were the result of an ongoing software transition.
"We do understand and appreciate the lateness of the materials being delivered to you," Interim Budget Director Kathryn Fitzpatrick told council members. "We pulled it together as soon as we could, and we continue to try to refine it so that we reduce response time in the future."
The mayor's budget team gave out corrected copies minutes before the meeting started, but Finance Committee members said that didn't give them enough time to review the proposal and prepare tough questions.
"It gives me great pause that there aren't other things we're going to uncover as we continue our finance committee meetings," Councilmember Deidre Brodie said in an interview. "And even in the short time we did have to review what was in front of us, I was very concerned about the assumptions made that underpin some net new revenues that seem dubious at best. "
Council members also raised concerns about the mayor's proposed 0.5% sales tax increase and short-term rental fees, both of which would require timely approval by the State Legislature.
Some council members voiced concerns that the sales tax would hurt the city's poor and make Albany one of the municipalities with the highest sales tax in the state.
"This is, again, not something that anyone would wish for," Budget Advisor Bob Ward told council members. "But the sales tax does have the advantage, again, of being a stable and even growing revenue source. We know, based on many factors, including the discussion of debt that we heard earlier this evening, we know that the city's budget problems are not going away after one year."
The estimated $500,000 from fees on short-term rentals — including hotels and Airbnbs — would go to the city's contingency line, or rainy day fund, so it's not crucial to the 2027 budget.
But under the mayor's proposal, the city would be running a deficit if it didn't get the $5.25 million that the mayor's office said would be raised by the sales tax increase. Brodie said she was concerned that the city didn't have a backup plan for if the sales tax increase dies in the State Legislature.
"We do not have reserves left in the city of Albany. We blew through those over the last few years," Brodie said in an interview. "If one single dollar does not come in, we have a problem, and so I think we are justified in being extremely cautious about proposed new revenues around things like embellishment fees, sales tax increases, taxes on short-term rentals — you name it."
The hearing comes as city officials grapple with the results of budgets, prepared by the administration of then-Mayor Kathy Sheehan, that overprojected revenues and underestimated costs. A recent report from the New York State Comptroller's Office found that the city's last two municipal budgets contained "significant revenue and expenditure estimates" that were "not reasonable."
"We went through this exhaustive process every year," Councilmember Ginnie Farrell said during the meeting. "We've gone line by line and asked questions about everything every year, and despite all of those questions, none of that information came to light. I don't know if what we were told — I'm not sure what happened with that, but clearly, in asking those questions, we did not get fully true answers."
Gideon Grande, the budget director under the Sheehan Administration who resigned in March, was hired to create budgets for Schenectady County, according to The Times-Union.
