Schenectady residents are asking their elected officials to find another way to bridge the city's 8-figure budget gap after Schenectady Mayor Gary McCarthy proposed raising property taxes by more than 42% in his 2027 budget plan.
Ten city residents voiced concerns about the tax hike during a public hearing on the budget held by the Schenectady City Council Tuesday night.
"I don't want to come across as a 'slash everything, I don't want to pay taxes, I hate the school levy' homeowner.' That wasn't why I came tonight. I came because I implore you to be creative," Schenectady resident Schuyler Konior Kinneman told the council. "I ask that you consider far-fetched ideas that 10 years ago no one would consider."
The tax increases are meant to fill an approximately $15 million budget gap. The city is facing inflation, the end of federal COVID relief funding, rising healthcare costs, and salary raises, many of which are mandated by recently negotiated union contracts.
But residents like Hayden Schwartz, who financially depends on disability benefits, said a more than 42% tax increase would likely price them out.
"Is it because I'm not supposed to live here, and I'm supposed to be replaced with people that are going to bring more money to the city?" Schwartz said during the hearing. "And where am I supposed to go? How am I supposed to keep living in my house if I can't afford to keep it?"
At the end of the meeting, City Council President Carl Williams echoed concerns that the tax hike could price residents out of the city.
"Truly, we can name or number anything, but if it is not within the grasp of our tax base to our residents, I am also fearful of an exodus," Williams said. "I have two small children, and although my wife and I both work, that does not reflect the dynamics that exist throughout a number of our households in the city."
Residents questioned employee salary raises, cuts to summer youth programs and whether the city made its budget proposal accessible to the public. Representatives of a group called One Schenectady asked for more data to help them build out a budget spreadsheet they'd created to better inform the public.
City residents also floated new methods of balancing the budget, ranging from gradual tax increases and loans to reducing police overtime and additional taxes on homes not used as someone's primary residence.
A review of Schenectady's tax exemption programs for businesses gained popularity among attendees after it was floated by Jeffrey Edwards, a city resident who told the City Council those tax breaks were no longer necessary to attract businesses.
"If a business can't start surviving on its own, on its own revenues, after two or, at most five years, I'm sorry, it doesn't deserve to continue to exist," Edwards said. "So I think we need to look at these PILOTS, or payments in lieu of taxes. How much revenue would the city receive if all businesses were paying their full fair share?"
Many of those tax breaks for businesses are negotiated by industrial development agencies like the City of Schenectady IDA, or the Schenectady Metroplex Development Authority. Councilmember Carmel Patrick says those tax breaks — and rising costs — are out of the council's control, but she still wants to find ways to lower the tax increase.
"I appreciate what we heard tonight," Patrick said. "I think taxes are the main source of revenue. So, you know, we either cut services or or raise taxes, and it's going to be really tough."
After the hearing, McCarthy said he appreciated residents' concerns, but he defended his budget proposal, calling it "the most difficult budget" of his career. Previous budgets with low tax increases depended on federal COVID relief funding and the city's fund balance, both of which are now depleted, he said.
"They are big numbers, and so wasn't easy to put that forward," McCarthy said. "But again, appreciate people's concerned thoughts as we go through this process."
At least one member of the council — Justin Chaires, who is running for a full term on the council this November — has told WAMC he would not vote to approve a more than 42% tax increase.
Five of the council's seven members would need to approve the tax increase because it overrides the tax cap.
City code requires the budget to be approved by Oct. 31, although negotiations for the 2024 lasted until just before Christmas.
