Proposed tax hikes from Albany to Schenectady have residents reaching for their calculators. In Albany, Mayor Dorsey Applyrs released a budget calling for a 15% increase on the property tax levy. In Schenectady? 43%. Prices are going up for a lot of things, and that affects cities and towns too.
Read the full transcript below:
Sam Dingman: For months now, we've heard stories about rising costs for consumers. But what about cities and towns?
Schenectady Mayor Gary McCarthy: When people don't have place to live, when they don't have some of the basic necessities in life, end up making poor choices that draw in city services.
Sam Dingman: Municipalities around the Northeast are proposing major takes hikes to cover the costs of essential services...creating headaches for the city counselors...
Carmel Patrick: I whipped out my my red pen and my ruler. You know, to to accompany me as I went page by page and line by line.
Sam Dingman: So why is it getting more expensive to keep cities and towns running? And is there any way to avoid it?
Melissa Weltz: I'm not thrilled about it.
Sam Dingman: That's Melissa Weltz, a resident of the town of Rotterdam, New York. She's reacting to a recent announcement from Rotterdam's town supervisor, John Polimeni: her taxes might go up by 34% next year. Melissa says she's not necessarily opposed to paying taxes – but this...is a lot.
Melissa Weltz: I'm always very happy to when it's like school tax because, like, build your community kind of thing. But I want to see like what is the cause of the increase...
Sam Dingman: All around the Northeast – people are asking the same question: why are leaders of cities and towns coming out with budget proposals that contain massive tax hikes? It's not just Rotterdam. In Albany, Mayor Dorsey Applyrs released a budget calling for a 15% increase on the property tax levy. In Schenectady? 43%.
Grant Ashley: I think a lot of municipalities are just struggling to pay the bills right now, right? Like in a way that a lot of people are too.
Sam Dingman: To try and understand why this is happening, I sat down with WAMC's Capital Region Bureau Chief, Grant Ashley.
Grant Ashley: Prices are going up for a lot of things, and just as that affects you and me and our listeners, that affects you know cities and towns as well.
Sam Dingman: So, can you give us an example of something that a city is having to pay more for that would be driving up the overall budget picture that you know the average taxpayer might not be thinking about.
Grant Ashley: I can give you several examples.
Sam Dingman: Oh, good.
Grant Ashley: You know, municipalities provide healthcare to their workers, and healthcare expenses have gone up due to some, you know, federal changes and inflation and all that. So like they're paying more for healthcare. You know, municipalities have to buy things as well and you know give inflationary raises to employees in a lot of cases, and then you know I've also heard you know council members mention fuel as being an expense, right? Like you have all those police cars, all those fire trucks, all those you know municipal services vehicles, and all of those take you know fuel, and in some cases diesel, right? So that's gone up. That's increased the budget for municipalities. And then the other thing that a lot of people have told me is union contract negotiations. Right, unions are trying to you know get the best deal for their employees, get the best deal for their members, and that often means you know rising costs for municipalities. So a lot of city officials and town officials have told me that that's what's part of what's driving costs, right? And I think that's also partly in response to rising costs across the board, right? Because unions are, you know, looking at how much prices are going up for their members for groceries and childcare and all that, and then they're turning around to the municipality and saying, like, hey, look, we need an increase in, you know, these benefits, these wages for our employees in response to these economic conditions, and then that cost is kind of getting passed on to taxpayers in a lot of cases.
Sam Dingman: So everything is kind of getting compounded, right?
Grant Ashley: Exactly.
Sam Dingman: That all makes sense, and a lot of this stuff, you know, would be expensive and probably increasing in price under normal circumstances. We're of course not in this moment under normal circumstances. Prices are spiking, as you mentioned, across the board for a lot of reasons that have to do with policies at the federal level, whether it's tariffs or the war in Iran. There's also something called ARPA, the American Rescue Plan Act. What is that, and how is that playing into these price increases?
Grant Ashley: So the you know, as many people might know, the American Rescue Plan Act or ARPA was this you know infusion of federal funding to you know from the pandemic to municipalities, so that they could keep payroll going, keep providing services. You know, when maybe people are spending less on sales tax, and you know, there's a lot of uncertainty going around, right? So that money was kind of there to you know support cities and their budgets, and then also provide for you know, bigger projects, give that money out to nonprofits, right? Maybe you you know yeah take on a bigger project, right, that you wouldn't be able to do ordinarily. The problem is a lot of you know municipalities kind of went wild with that, right? Or you know they kept taxes down because like "oh, we have all this ARPA money" and it kind of papered over other financial issues. It kept you know things going and then you know as a city council member you're like oh I you know "we should probably raise taxes 12% but we have all this great federal funding so I don't have to pass that on to my constituents and you know. I can say like, oh, we're providing the same amount of services, and we're not raising your taxes at all. You can run on that." But now the bill is due.
Sam Dingman: So there was some kicking the can.
Grant Ashley: Absolutely.
Sam Dingman: And to be clear, that is because ARPA funding is expiring?
Grant Ashley: Correct.
Sam Dingman: When Mayor Gary McCarthy announced the proposed 43% tax hike in Schenectady, he knew people it was going to be a tough sell. But he says the city is in a bind.
Gary McCarthy: People aren't happy about it, but you know, the city we've cut taxes over the last 10 years, so the tax rate in the city of Schenectady is lower today than it was 10 years ago, and inflation has you know been 2% 3% I think one year it was 6%.
Sam Dingman: McCarthy says for a while, Schenectady had a balance of funds they could allocate towards the cost of local services. But there's nothing left.
Gary McCarthy: And the ARPA money is gone, and so that creates the shock value, and have to make it up one way or the other.
Sam Dingman: All of this is also happening as communities around the Northeast are starting to feel the impacts of President Trump's One Big Beautiful Bill, which changed the requirements for Medicaid and SNAP benefits. People with certain immigration statuses will no longer be able to access Medicaid. And starting in January, people will have to show proof that they're working, in school, in job training, or volunteering to access SNAP. I asked Grant how those changes play into the budget picture at the local level.
Grant Ashley: I think you know the way some officials are thinking about this is very indirect. Like I talked to the mayor of Schenectady, Gary McCarthy, and he told me like, you know, look, like we're not expected to pick up the tab for you know these SNAP cuts, obviously, but you know we might have more people in poverty and people in need, and maybe that leads to an increase in crime.
Gary McCarthy: When people don't have place to live, when they don't have some of the basic necessities in life, they end up making poor choices that draw in city services.
Grant Ashley: Yeah, like you could have a bigger strain on you know the city mission or you know the Salvation Army or whatever we're talking about, right?
Sam Dingman: And I mean, I guess the other thing we should keep in mind in all this is, if you're the person who has lost health care, you're also the person who now ostensibly has to pay way higher city taxes.
Grant Ashley: Yeah, yeah, yeah. Right, exactly.
Sam Dingman: As maybe your property tax is going up.
Sam Dingman: Right now, these tax proposals are just that – proposals. It now falls to city and town councils to reconcile what local leaders say they need with what they think people can – or will – actually pay. That's why Schenectady city council member Carmel Patrick recently stayed up late reading through the budget proposal in detail.
Carmel Patrick: I whipped out my my red pen and my ruler. You know, to to accompany me as I went page by page and line by line.
Sam Dingman: Carmel knows that 43% percent is going to be a tough pill for Schenectady residents to swallow.
Carmel Patrick: I mean, even 10% would have been difficult, but I mean, I think we're gonna have to see what we can do.
Sam Dingman: That's where the red pen and the ruler come in. Carmel and her colleagues are scrutinizing every line item in the proposed budget, looking for places to trim to try to get that 43% number down. Ultimately, though, Schenectady doesn't have a lot of options. Barbara Van Epps is the Executive Director at the New York State Conference of Mayors.
Barbara Van Epps: Unfortunately, because local governments have few non-property tax revenues available to them, the property tax is the one thing they can control, and while no local official wants to raise taxes, unfortunately, that is sometimes the only place they have to turn.
Sam Dingman: Which is why it's going to be a busy fall for Schenectady City Councilmember Carmel Patrick – and Grant Ashley.
Carmel Patrick: I think it's going to be very lengthy meetings.
Grant Ashley: And I will be in those lengthy meetings with you.
Carmel Patrick: Yeah, bring snacks. What I can say.
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