“[T]he mayor shall prepare and submit to the [fiscal stability] authority a four-year financial plan, and the mayor’s proposed city budget, not later than the date required for submission of such budget to the council pursuant to the city charter…
“Such financial plan shall… contain actions sufficient to ensure with respect to the major operating funds for each fiscal year of the plan that annual aggregate operating expenses for such fiscal year shall not exceed annual aggregate operating revenues for such fiscal year.” – New York Public Authorities Law, Section 3857
There is a document included with acting Mayor Chris Scanlon’s proposed 2025-2026 city budget entitled “Four Year Financial Plan 2025-2026 to 2028-2029.” It’s 85 pages long and includes the proposed budget and employment levels plus budget information for the Buffalo Municipal Housing Authority and the Urban Renewal Agency.
Focusing on the City of Buffalo, the document has just three pages of tables concerning projected revenues and expenditures providing minimal information, leading to more questions than answers.
Here are some of the things in the four-year plan that require more numbers and explanations:
- The table entitled “Summary of Revenues and Expenditures” reports that revenues and expenditures are expected to match for the four years of the plan. The yearly numbers, however, raise several questions:
- The plan is that between the 2025-2026 fiscal year that begins July 1, 2025, and the 2028-2029 fiscal year that concludes on June 30,2029, total spending is expected to increase by $8,040,000, just 1.3 percent higher four years from now. It is impossible to square those numbers with previous actual and proposed spending.
- The upcoming budget includes a total of $101.3 million to pay for the medical insurance of active and retired employees. Between 2021-2022 and 2023-2024 those expenses increased over 20 percent. Through the first three quarters of the current fiscal year the city has spent 96 percent of the budgeted $95.5 million.
- If those expenditures increased by a guesstimated 8 percent per year that would mean that in the fourth year of the plan total costs for medical insurance would be about $127 million. That’s an increase of approximately $26 million in spending just for medical insurance, which is more than three times what the table is projecting as the total amount of spending increases for the entire city budget.
- The costs of payments to the state retirement systems for uniformed and non-uniformed employees is budgeted in the year beginning July 1 at $61.3 million. Between 2021-2022 and 2023-2024 those expenses increased by 17 percent.
- A guesstimated eight percent in annual growth in those expenses over the next three years would mean that the city would need an additional $16 million just to cover the extra costs of pensions in the 2028-2029 fiscal year.
- The retirement system projections may be low. The state retirement funds are likely being negatively affected by tariff turmoil. When such things happen the funds send larger bills to the municipal employers.
- The four-year plan offered by the Scanlon administration reports that the entire fringe benefits budget line, which besides medical insurance and retirement benefits costs also includes FICA, unemployment insurance and other benefits, will only grow by $6 million in the four-year period. In actuality the increased spending will be tens of millions of dollars higher.
- Obviously there are many more expenses in the budget that will also grow over the next three years. The point is that, based on recent history, the two categories of fringe benefits expenses alone might require an extra $42 million in 2028-2029 – far above what the city’s four-year financial plan projections suggest will be needed to fund city operations three years hence.
- Various numbers have been offered as projections for what the sale of the city’s parking ramps might bring the city, ranging from $40 million to $60 million. No explanations or calculations are provided. At this moment there is no certainty about whether legislation creating the Parking Authority will be approved. The 2025-2026 budget seems to suggest that if the Authority is created only $28 million would be used from that one-time revenue source. Any remaining funds could be used in the out years.
- BUT… That assumes that the 2025-2026 budget numbers on both the revenue and expense side are solid. That doesn’t seem to be the case. Consider only a few items that are out of kilter for the new year:
- The budgeted amount for overtime expenses is $24.6 million. That is $15 million less than what was actually spent last year. Through the first three quarters of the current fiscal year the city has spent $28.3 million, which is 30 percent more than was budgeted.
- The projected revenues from increases in fees is 51 percent higher than what is budgeted for the current year. The Common Council will need to increase a wide variety of fees. The Council turned down an increase in parking fees last year.
- The projected revenues from the state/Seneca Nation compact, whenever it is approved, are listed at $11 million. That could be several millions more than what is eventually available.
- Payment in lieu of taxes is $1.1 million higher than what is currently budgeted, representing a significant increase in those revenues compared with what has been received in recent years.
The 2025-2026 budget has reportedly squeezed out some vacant positions, which means that there will be less wiggle room to move money around if any or all the above questionable expenses and revenues create problems. That could mean that any additional portion of the proceeds from the sale of the ramps (if that is approved by the state) over what is already factored into the new budget might be needed to plug holes in the 2025-2026 budget, leaving less (or nothing) for the out years.
None of the above issues includes any additional costs from new union contracts for police, fire, and other employees. The police and fire contracts expire this year.
Add up all of this and the picture for the next four years for the City of Buffalo is murky at best and disastrous as worst.
The control board needs to be activated to get a hold of this runaway train before its goes totally off the tracks.
John LaFalce
Former Western New York Congressman John J. LaFalce passed away this past weekend at the age of 85.
I first met John in 1971. He was a newly elected member of the State Senate. I was a graduate student at SUNY/Albany and had a part-time job with the State Legislature.
After a term in the Senate John was elected to the State Assembly. Then in 1974 he was elected to the House of Representatives, a position he held for 28 years.
During his time in the House John became an active and leading member of the House Financial Services Committee. He led the fight for federal funding to deal with the environmental disaster known as Love Canal and led efforts to create the federal Super Fund that was set up to deal with such catastrophes.
After he left Congress we were both at Canisius College. John produced a speakers series on important topics for the students. I was the director of government relations. We took the opportunity to get together for lunch occasionally and he often commented on my blog posts.
John LaFalce served during a different era in Congress, when across-the-aisle work was more common than the vitriolic manner that often exists today. The public was well served with John LaFalce in Congress. Rest in peace, John.
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