BUFFALO, N.Y. — According to the Buffalo Fiscal Stability Authority, the city of Buffalo is considering using American Rescue Plan funds for revenue replacements.
The looming budget deficit could be anywhere between $15M and $30M according to the BFSA.
Right now, the city is sitting on $41M of ARPA funds that are unobligated, meaning that no contracts have been signed to allocate the money for projects.
Officials from the BFSA tell 2 On Your Side that city finance staff members reached out to the authority earlier this week to because recent deficit projections appeared "higher than first thought."
Back in September the fiscal authority recommended that the city begin clawing back ARPA commitments, as there was significant revenue uncertainty.
"The reason is that if we do not use the money by the end of December and have it all encumbered, the federal government potentially is going to take that money back," said Fred Floss, secretary of the BFSA
The city hasn't met its revenue projections, mainly due to a lack of revenue's from cannabis dispensaries and the Buffalo Creek Casino.
"This is about the only thing that the city can do with the ARPA money to make sure that we encumber it and spend it and not lose it."
The city of Buffalo received $331M in ARPA funds in 2021.
Previously, the city of Buffalo allocated $160M from the American Rescue Plan to replace revenues and fill budget gaps.
When the city first submitted their ARPA plan, $100M was automatically being used for revenue replacements.
In July 2023, Mayor Byron Brown requested an additional $60M for the deficit. Despite an outcry from Common Council members at the time, the request was granted.
If acting Mayor Chris Scanlon, upon the recommendation of the city's finance department, moves forward with a request to use the remaining $41M for revenue replacement, a total of $201M of the ARPA funds will have been used for deficit corrections.
The city is going to need to find ways to raise revenues, according to Floss.
"If we do nothing, then, because costs are rising, we're going to see a hole in our budget," Floss said. "We're going to have to look at raising revenues."
The city hasn't been able to collect casino revenue from the Seneca Nation, because the Nation and New York State are still negotiating a compact agreement.
Towards the end of October, Governor Hochul indicated that the state would be giving Seneca Casino host city's an advance on their expected revenues.
2 On Your Side has asked the Governor's office whether or not those payments were sent out, and how much was sent, but they didn't follow through with the information as of Wednesday night.
During his ceremonial swearing in on Tuesday night, acting mayor Scanlon said that his "administration will leave no stone unturned to maximize our service delivery while minimizing the impact on taxpayers."
Whether that means not filling vacant roles, or cutting positions all together remains to be seen. Scanlon said he will be releasing a series initiatives and announcements about streamlining city government in the coming weeks.
As for raising revenues in the city, Floss says property taxes will need a close look by the Common Council.
"If we look at property tax rates in Buffalo and how much you're actually paying in dollars, we're still below the cities in Rochester and Syracuse and Albany," Floss said. "So there's room for us to raise property taxes, and those are going to be the hard decisions that the council is going to have to make."
2 On Your Side reached out to acting Mayor Scanlon's office for comment, while they didn't confirm what the BFSA indicated, the city did confirm that $41M in ARPA funds remains unobligated.