The Schenectady City Council passed a budget with a 14% property tax levy increase, down from the original 43% proposed by Schenectady Mayor Gary McCarthy.
Five members voted to pass the budget, with Councilmember John Mootooveren in opposition. Councilmember Carmel Patrick was absent.
Council members drastically reduced the proposed tax hike by including an additional $6.5 million in state aid — money that they haven’t secured. Council members also increased the amount of money they expect to raise from the sales tax and slashed $1.7 million in spending by cutting overtime spending, vacant positions and stipends.
But few seemed particularly happy with the adopted budget.
“I'm struggling there,” Councilmember Doreen Ditoro said before the vote. “I'm going to say yes for the safety of our budget and our residents. Disappointed with a lot of things, a lot of individuals. But I'll say yes.”
The budget’s passage comes after a month of negotiations as Schenectady lawmakers worked to fill an approximately $15 million budget gap without overburdening residents with property taxes.
Like many municipalities across New York, the city is facing the end of pandemic-era federal funding, inflation, negotiated salary increases and rising healthcare costs. The city will end 2026 with an empty general fund balance, and the state comptroller's office rated Schenectady as being “susceptible to fiscal stress.”
The council was supposed to pass a budget at a meeting on Monday — a day later than the city charter-mandated deadline to pass a budget “on or before” Nov. 1.
But a proposal with a 15% increase failed to advance after three of seven council members refused to back a tax increase of anything over 13%, arguing that many Schenectady residents were already struggling to make ends meet. A supermajority of five members was needed to override the New York State tax cap.
“I feel like 14 [%] is meeting us in the middle,” Kim Wiggins, one of the councilmembers holding out for a 13% property tax hike, said ahead of the vote Thursday night. “I feel like it's a fair deal for our community, and I’m willing to move forward.”
In order to make up for the money lost by reducing the property tax hike, Thursday’s compromise further increases the amount of money the city expects to make from sales taxes — without increasing the sales tax rate.
“I think the sales tax number is budgeted a little high,” Engert said after the vote. “Do I think we'll hit it? I'm not 100% sure, I haven't seen the new updated third quarter report from the New York state comptroller. I'm hopeful. I'm crossing my fingers that we hit it.”
Since the budget depends so heavily on that extra state aid, failure to secure it would likely result in “substantial layoffs and reductions in service,” according to Mayor McCarthy.
“That budget was bare bones,” Councilmember Hayden Engert said after the vote. “There was nothing in that budget that we could cut.”
The council unanimously passed a non-binding resolution requesting that aid from the state Monday night, and the lobbying efforts started shortly thereafter.
State Sen. Pat Fahy — one of the New York state legislators representing Schenectady, who will be crucial to securing that additional state aid — confirmed to WAMC that she spoke to McCarthy about the budget Monday. She wouldn't say whether she thought $6.5 million was a realistic figure to request from the state.
McCarthy was optimistic about the chances of getting that extra aid, especially given the election of Democrat Sarah Rogerson to the State Senate seat long held by Jim Tedisco, a Republican. The district includes parts of the city of Schenectady.
“I've had conversations since I've been mayor asking for additional equity in terms of the funding formula for the city of Schenectady and other communities across the state,” McCarthy told reporters Thursday evening. “Now we have a budget, we'll be able to put a formal message together.”
