The Buffalo Common Council on May 27th adopted the 2025-2026 city budget, totaling $622.1 million. The Council presented some important policy matters but the actual approved spending plan mostly agrees with the budget proposed by acting Mayor Chris Scanlon. Seventeen budget lines, out of the hundreds included in the annual budget, were amended including $1.3 million in line-item cuts and an equal amount in line-item additions. This continues the pattern of budgets previously submitted and approved under former Mayor Byron Brown’s watch.
The Council released a statement listing “Council Budget Priorities and Structural Policy Reforms.” The priorities included:
- “Establishing a Circuit Breaker Program for Low-Income Residents… to provide targeted relief to households whose tax liabilities exceed a defined percentage of their annual income.” State legislative approval would be required.
- “Curbing Excessive Overtime Spending Across Departments… The Council seeks immediate action to rein in chronic overspending on departmental overtime – especially in Police and Fire.”
- “Requiring Reimbursement for Large Event-Related Public Safety Costs.”
- “Grants-in-Aid (GIA) Funding for Cultural and Anti-Violence Initiatives… The Council seeks to restore Grants-in-Aid funds to reinstate support for frontline arts programs that were cut … in December 2024. We further request that $403,000 in FY 2025-2026 GIA funds be dedicated to cultural and anti-violence initiative…”
- “Council Representation on the Buffalo Parking Authority.”
The new budget continues the use of some overestimated and uncertain revenues and underestimated expenses. That remains an issue even though the state recently authorized the city to impose a hotel occupancy tax and to create a Parking Authority that will potentially produce tens of millions of dollars in one-time revenues.
Here are some issues on the revenue side:
- Parking Authority revenues. The first step is to create the Authority and its bureaucracy. Once set up, the Authority will need to hire staff, attorneys, accountants, and various consultants to evaluate the potential sale of the city’s parking ramps. That will eventually lead to the sale of bonds in volumes and with interest rates that remain to be determined. Where will the Authority get the start-up cash for employees, attorneys, consultants, etc.? Those expenditures will cost hundreds of thousands of dollars.
- The administration has proposed a “gap plan” which, according to a Buffalo News story “assumes that none of that $42 million is delivered to the city, calls for $30 million in short-term borrowing and a 5% reduction in spending, most of which would come from personnel cuts across most city departments. {Finance Commissioner Raymour] Nosworthy stressed that the administration believes these worst-case scenario plans won’t be needed… [and] that the ramp sales or the gaming compact are delayed, they have the option of short-term borrowing that will allow the city to bridge the gap until those revenues materialize.”
- State Senator and mayoral candidate Sean Ryan has proposed that the Buffalo Fiscal Stability Authority (BFSA) be authorized to sell deficit bonds on the city’s behalf. Scanlon criticized Ryan’s proposal.
- The city administration, without any public documentation, stated that the ramp sale plan would produce $42.2 million, with $26.5 million directed to the 2025-2026 budget and the remaining amount to be held in reserve for the next three years. Potential holes in the approved budget may occur due to overstated revenue estimates.
- Even if Parking Authority revenues pan out as anticipated there is no additional recurring or new revenue sources identified for subsequent years after the one-time parking ramps cash is fully expended.
- The new budget projects $11 million in revenues from the Buffalo Creek Casino even though there is no new state/Seneca Nation compact in place at this time.
- Parking fines, violations, and related revenues are estimated at $10.6 million based on projected usage and increased rates. The BFSA has raised issues about that revenue estimate.
Issues on the expense side:
- The total amount ($24.6 million) budgeted for overtime citywide, primarily in the Police, Fire, and Public Works Departments, leaves a wide gap in the multi-million-dollar range. The Council actually cut an additional $1 million in Police and Fire Department overtime accounts from the proposed budget. Total overtime expenses in 2023-2024 were $39.6 million. Through April 6th of this year the city had already spent $28.3 million. The Police and Fire contracts expire on June 30. New contracts could help or hurt the ability to control overtime expenses.
- Other employee and retiree benefits including medical insurance and retirement system expenses could add to the imbalance of the new budget during the course of the year. The BFSA has noted that “[h]ealth insurance in total has increased on average 7.5% over in the past 3 years. The budget increases 4.8% in 2025-26, and thereafter health insurance increases by 2.5%, 1.0% and 1.0% in 2026-27, 2027-28, and 2028-29. Health insurance is likely underestimated over the Financial Plan.”
- The state’s retirement systems are invested in a variety of businesses that are subject to the roller coaster tariff policies of the Trump administration. It is quite likely that the valuation of the state retirement systems’ accounts are being negatively impacted. Negative results for the retirement systems are always followed by mandated increases in local government contributions to the systems.
The 2025-2026 budget is accompanied by a four-year plan for city finances. Issues noted for the year beginning July 1 will continue operating deficits over the next three years. On top of that, federal budget cuts will directly impact the city while federal cuts to the state could trickle down to local governments.
This past Monday the Buffalo News had an article about the views of this year’s mayoral candidates, asking “what would be your plan to bring things back in line and provide city residents with a more consistent and predictable future in terms of delivered city services and tax bills?” Six candidates responded without getting into any dollars and cents specifics. The Republican candidate, James Gardner, “declined to submit answers, saying he is waiting to see who remains in the race after the Democratic primary before publicly stating his positions” – a very strange response.
The new Buffalo budget is now in place but it continues a variety of problems that have haunted the city for many years. Next up: the response from the BFSA.
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