BUFFALO, N.Y. — For months, city lawmakers have been saying that there will be tough decisions in the next budget cycle.
As fall marches on, and a new administration likely being sworn in next week if Mayor Byron Brown accepts the position being offered by the Western Region OTB, there is renewed focus on the budget deficit and how to actually fix it.
Earlier this week, the Buffalo Fiscal Stability Authority, often referred to as the Buffalo Control Board, addressed the budget gap and requested that the city provide a gap plan in the event certain revenue streams ultimately don't produce any revenue.
"There are a number of revenue sources that are uncertain, there are a number of costs that are uncertain, and we're going to put a range around that so that the council can understand what the parameters are and make good decisions," said Fred Floss, secretary for the Control Board.
Right now the Control Board believes the budget gap will range between $10 million to $15 million next year.
However, if casino revenue, cannabis tax revenue and FEMA reimbursements from several storms in recent years fail to be received, the deficit will be higher.
"We don't know when they'll come in if they take longer than what we expect," Floss said. "Then you're going to see a bigger hole in your budget, and we're going to have to try to close that in some way."
New York State and the Seneca Nation are still negotiating a new gaming compact, so any revenues generated at the Buffalo Creek Casino have been held in escrow until the deal is made.
As for cannabis tax revenue, multiple lawsuits slowed the rollout of the recreational marijuana program and thus impacted the amount of taxes collected by the city.
That's why the Control Board asked the Mayor to submit a gap plan to the authority by Nov. 1.
"What a gap plan does is it says if the revenues don't come in, if the costs go up more than you expected, how are you going to make sure that you have a balanced budget?" Floss said. "We'd like you to do it now, and let's have those discussions now so you're not doing it in an untoward fashion going forward or under the gun."
To cut, or not to cut?
There are few different ways to fill the budget deficit. Depending on who you ask, the answer is usually cut, or spend more.
Assemblyman Jon Rivera says that it's unreasonable to ask the city to cut any planned hires for essential services in the coming years — which is an idea representatives from the city floated during the Control Board meeting Monday.
"The truth of the matter is, we're not going to dig ourselves out of a multimillion dollar deficit simply by not hiring people," Rivera said. "By not hiring people, what we're saying is we're OK with services being worse than they already are."
Rivera went on to say that Buffalo's challenges, at least the ones he's hearing from constituents, were years in the making.
"We have a city council that sort of went along with it, unfortunately," Rivera said.
Mayor Brown proposed a 9% tax hike in the 2024-2025 budget. Ultimately it was reduced to 4.19% and approved by the Common Council.
"In my opinion, we cannot raise our taxes out of this deficit," Fillmore District Councilmember Mitch Nowakowski said. "It's just not plausible at all."
Nowakowski agrees with his colleagues on the council that "tough decisions" need to be made, but he also emphasizes that the state will need to provide additional funding to the city as well.
"Unless we get a significant windfall from state aid, we're going to have to really look at what services look like in comparison to our revenues," Nowakowski said.
The adopted city budget for 2024-2025 is $617,158,042, a 6.9% increase from from last fiscal year.
"$177 million are collected in city taxes, but here's the thing, we give half of our city levy to the buffalo public schools," Nowakowski said. "So roughly $78 million are city tax dollars out of an entire half a billion-dollar budget."
Nowakowski reiterated that adjustments to state and federal aid are necessary to address budget gaps next year.
"The truth of the matter is, we provided the city of Buffalo this year $5 million more in state aid that they had ever gotten," Assemblyman Rivera said. "For what? To still be in the hole, to still not make the tough decisions?"
Nowakowski said it's not enough.
"$5 million out of a $40 million deficit is a drop in the bucket," Nowakowski said. "We appreciate it, and it does help with revenue and cash flow, but that's really insignificant."
Pull back ARPA funds
One idea the Control Board has was to pull back ARPA funds from cultural organizations that might not need the money right now, or haven't received it yet.
"The control board said, if the community groups have not by a certain date do not have the appropriate documentation, to not have the signed contracts, that then the city should be looking at bringing that money back in and appropriating it so that the Federal dollars are lost to the city of Buffalo," Floss said.
American Rescue Plan Funds need to be obligated by the end of 2024, otherwise the local governments must return the money back to Uncle Sam.
"Any notion that we should crawl back that money because we are in a hard financial position, I don't think, is right," Nowakowski said. "I understand that we have a deficit, but we have been structurally deficient before I even came out to the Common Council."
Floss went on to say that the city could make cultural organizations whole in the future by issuing a bond sale or incorporating the money that was promised into future budgets.
"We want to make sure we spend all of our [ARPA]money, because if not, then that's going to have to come out of the community's budgets," Floss said.