It is not unusual for a government’s chief executive to leak or directly announce some highlights about the next budget they will be presenting. Usually the tidbits are to show some positive plans and initiatives. Buffalo Acting Mayor Chris Scanlon has taken a somewhat different approach as he heads toward the official April 8 release of his 2025-2026 budget.
Thus far Scanlon has indicated that he will include the following in the budget (with some analyses offered):
- A three percent hotel occupancy tax which he says will produce $3 million annually to help fill the budget gap. Last year Mayor Byron Brown proposed a five percent occupancy tax. The request for state authorization came late in the legislative session and was not approved. A request this year has more time to move through the Legislature if there is support to do so. A WGRZ-TV report last week had a local hotel owner supporting the tax but asking that the funds be devoted to promoting tourism. A WIVB-TV report quoted the president and CEO of Visit Buffalo Niagara, Patrick Kaler, as questioning the imposition of the new tax, saying “our visitors are already paying their fair share when they come to our destination.”
- A proposal will be on the table to sell the city-owned parking ramps to a newly created Buffalo Parking Authority that would operate the ramps. Creating a new public agency will also require state legislation. The Authority would sell bonds to purchase the ramps. Forty to forty-five million dollars is the amount being discussed as a one-time payment to the city but how those numbers were arrived at is unknown. It seems like it is intended as a “plug number,” meaning that after settling on a total amount of proposed spending and deducting what property taxes, fees, and other revenues will produce there remains a large dollar amount that needs to be addressed.
- That money would come to the city as one-time revenue, which could fill a large part of the budget hole for next year but would not help the city achieve a structurally balanced budget for the long term. The 2026-2027 budget would be dealing with another large hole. A new bureaucracy would be created to run the ramps. In order to pay off the bonds the new Authority will likely need to raise the rates for use of the ramps. So call this the “kick-the-can-down-the-road” plan.
- If the new Authority is created will it take responsibility for paying off the more than $3 million of outstanding debt that the city is carrying for parking facilities? Would it backfill the city’s loss of annual revenue that the city now collects from the ramps?
- Here’s some local historic prospective: as part of Erie County’s fiscal meltdown in 2004 county government had the Erie County Medical Center, in effect, buy itself from county government for $85 million; county government agreed to retain various financial responsibilities for the hospital. The hospital was left with a substantial debt. The one-shot revenues did not really resolve the county’s fiscal mess which led in 2005 to the imposition of an additional 0.75 percent increase in the county’s sales tax.
- Mayor Scanlon last week admitted that the 2025-2026 budget hole was “north of $50 million.” Even with one-time fixes that are being proposed the city will still have a very large and growing problem in the following years. He is paving the way for the inevitable property tax increase. If the Mayor and Common Council wanted to really show that they are serious about moving toward a budget where operating revenues equal operating expenses, they would propose a property tax increase in the range of fifteen to twenty percent. That’s not going to happen.
Along with the proposals noted above, look for the revival of plans to increase city street parking rates and various fees for city services. Service cuts will be included, which will be tough since nearly two-thirds of the city budget goes to untouchable expenses (debt service, retirement systems payments, medical coverage for retirees, and the Buffalo School system); plus the two largest departments (Police and Fire) which will probably avoid any major cutting.
The city government put itself into this situation over the past 12 years by using up reserves, using up one-time federal relief funding, and approving hardly any property tax or fee increases. The Common Council cooperated with Mayor Brown in that work.
Governor Kathy Hochul earlier this year dismissed the possibility of contributing to the bailout of the city and except for a small increase in the Assistance and Incentives to Municipalities account there is no current plan to increase that amount in the new state budget, which was due on April 1. The state budget will be late and things could change, particularly if there is actually some movement on filling the vacancies on the Buffalo Fiscal Stability Authority (BFSA); stories to that effect were circulating last week.
It would seem appropriate for the BFSA to immediately advise the Mayor and Common Council that postponing the impending fiscal crisis is the wrong thing to do.
The state could have its own problems latter this year whenever Congress and Trump/Musk finalize their slash-and-burn budget for 2026. If the state has to go back to the financial drawing boards when that happens, local governments, including the City of Buffalo will be negatively impacted too. It’s happened before.
Next week
The new city budget will be released on Tuesday, April 8th. To permit reporting and analysis of the new spending plan Politics and Other Stuff will publish next week on Wednesday, April 9th.
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