Several Capital Region municipalities are proposing steep tax increases and significant cuts to address large budget gaps. Among them is the city of Schenectady.
Capital Region Bureau Chief Grant Ashley joined Ray Graf on Midday Magazine to discuss more.
INTERVIEW TRANSCRIPT
Editor's note: this conversation has been lightly edited for clarity.
Graf: So, what's in this budget?
Ashley: The big headline number is a roughly 43% tax levy increase. The budget also eliminates about 30 positions in various departments. Some of those are vacant, and it's designed to close an eight-figure budget gap. That exact deficit number wasn't in the budget plan, but Mayor Gary McCarthy told me there was a baseline of $10 million to $11 million plus some more for increasing expenses.
We're definitely looking at eight figures, and spending is still up about $4.5 million. This proposal comes on the heels of a New York State Comptroller's report that found that Schenectady was quote susceptible to financial stress, so not in a crisis yet, but pretty close. And McCarthy told me this was necessary given the city's financial position.
McCarthy: There hasn't been any willingness to address some of those things going forward, and as a result of that, we're in now a precarious position where the options are kind of dire.
Graf: Now, what would this budget proposal mean for residents?
Ashley: You're looking at hundreds or thousands of dollars more in property taxes for homeowners, possibly some reductions in services, and multiple city officials told me they've been hearing from residents who say 43% is too much. City Council President Carl Williams, who's a political opponent of McCarthy's, told me he doesn't think the mayor gave them a workable budget. He says that the city can't go to taxpayers for more money first thing, or residents will get hurt financially and potentially have to leave.
Williams: I don't think that's an appropriate way to go about ensuring that the city is fiscally sound, especially when we have a median income of $58,000 for many households, and especially for households that throughout the city are severely rent burdened. It is just a consideration we have to keep in the back of our minds.
Graf: That's a big tax increase and a pretty big budget gap. How'd the city get there?
Ashley: Part of this is just what's happening across the region. Prices are up for everybody, and they're up for cities and towns. You've got inflation, fuel prices are up. Towns and cities have a lot of vehicles that require diesel, right? So that'll bump your bill up. The city also had to negotiate some union contracts, and union members got raises, so that's a increase in prices. And a lot of this also has to do with the end of federal pandemic era funding from the American Rescue Plan Act. The city was using that to fund some positions, you know, fill some holes in the budget, and that money is not there anymore. And Williams told me the city didn't do enough to prepare for the end of that funding.
Williams: But recognize now that some of the lines that we use to support, such as adding positions to the city budget with no real intention or pathway of how we remove those when that funding stream is taken away. I think that put us in a similar position.
Ashley: And this will come as no surprise to anyone who follows Connecticut politics, but Mayor McCarthy blamed the city council for this. He proposed a 17% tax levy increase last year, and that got whittled down to just under 2%.
McCarthy: The council last year — they were unwilling to address anything. I'm hoping they approach it with a different mindset this year.
Ashley: And I did put McCarthy's criticisms to Williams, and he said that 17% tax increase was still "anything but moderate," and it still would have surprised and financially hurt residents. So 43% is a really big number. Can that pass? The math gets a little bit tough here. Schenectady City Council is all Democrats. They are not all Democrats who like each other and get along, right? So, this would require them to override the tax cap that requires a supermajority, which would be five of the seven members on the council. I called up Justin Chaires for this because he's the newest member of the council and he's the only one facing election this November. So he's got that election pressure on him, and he told me flat out that he won't vote to increase taxes 43%.
Chaires: I live in the city. I take care of older parents as well. I have members of my family that are on fixed incomes. I have younger cousins that bought houses in the city as well. You know, this is not something that that is going to be an easy pill for people to try to swallow, and like I said, I can't get behind that. It's not fair to residents.
Ashley: And so, if Chaires is against it, you only get one more defection, right? So then that begs the question: What do you cut, or how do you get more money?
Schenectady city officials have floated a lot of new ideas to me in my interviews with them. You know, maybe it's trying to get more state aid, or a bigger portion of county taxes, or doing more building enforcement inspection, ending tax breaks for businesses.
The problem is a lot of those are more medium to long term solutions. They don't necessarily help you this month. Councilmember Carmel Patrick told me this is a "dilemma," and they have services they have to provide. The cost of those services is going up, and people don't want to bear that tax burden, and that puts the city in a pretty tough spot.
Patrick: You know, we'll see how these discussions go, but like I said, I mean, we have to maintain a certain level of service, and because of increased costs across the board, you know, it's going to be difficult.
Ashley: And the budget deadline for Schenectady is Oct. 31. Although not that long ago, the 2024 budget negotiations dragged on until just before Christmas. So we'll have to see what that ends up looking like.
