Tough decisions ahead as Schenectady seeks to plug $12M deficit

Schenectady Mayor Gary McCarthy. File Photo

Schenectady Mayor Gary McCarthy. File Photo

Categories: News, Schenectady County

SCHENECTADY — As he prepares to release his proposed budget for next year, Mayor Gary McCarthy hopes the financial crunch will be short-lived.

But in the meantime, City Hall must plug a deficit of at least $12 million caused by the pandemic that has ravaged sales tax revenues, including the temporary closure of Rivers Casino, which generated $2.9 million for the city last year.

The city is also grappling with a 20-percent cut in state Aid and Incentives for Municipalities funding amounting to roughly $2.2 million.

McCarthy will present his proposed 2021 spending plan to the City Council on Thursday.

In some ways, the climate is more challenging than the aftermath of the Great Recession.

“It happened much more rapidly, and the impacts are being felt quicker,” McCarthy said.

Among the biggest question marks are potential layoffs and a property tax increase.

“It’s going to be one of toughest budgets we’re going to face in a long time,” said city Council President John Mootooveren. “For many of us, it’ll serve as the first time we’ve seen the impact COVID has delivered on the city.”

It’s a dramatically altered landscape from last fall, when the City Council adopted a $112 million budget (later revised to $114 million to appropriate funds for a Schenectady PBA contract). That budget contained a 1.54-percent property tax cut for homeowners.

Lawmakers also boosted spending for the Schenectady Neighborhood Assistance Program, addressing a longstanding complaint from residents about poorly maintained city-owned properties.

Now much of that progress may be swept away.

And while crime last year was on a decade-long decline, violence has increased, making any proposed cuts to the city Police Department likely controversial.

Absent a federal relief package, McCarthy said in April, the city could be forced to lay off as many as 40 police officers and 27 firefighters.

While relief has failed to materialize, layoffs among the city’s 600-strong workforce were averted after the city borrowed $7 million last week.

Yet 47 city jobs have gone unfilled as a result of a hiring freeze and McCarthy has ordered all departments to rein in overtime.

Spending on city Police and Fire departments constitutes 26 percent, or $29.3 million, of this year’s budget — not including overtime.

City Councilwoman Leesa Perazzo said she hoped McCarthy would offer a “thoughtful” proposal and not a “slash-and-burn budget that will make City Council look like bad guys.”

“My top priority would be to make sure city services stay intact,” Perazzo said. “I do not support in any way cutting from the Police or Fire department, so we’re going to have to take a long hard look at things.”

That includes possibly dipping into fund balance to offset potential tax increases and other cuts.

“They call it a rainy day fund for a reason,” Perazzo said, “and it’s pouring right now.”

A property tax increase would reverse ongoing trends, with last year’s modest cut resulting in a cumulative 8 percent decrease over the past five years.

Once McCarthy presents his proposed spending plan, lawmakers will hash out details in a series of workshops until the public hearing, which is scheduled for Oct. 13.

The City Council must adopt a plan by Nov. 1.

Councilman John Polimeni, chairman of the Finance Committee, said leaning too heavily into savings would have a negative impact on the city’s bond rating.

The fund isn’t close to being depleted — at least for now, he said.

“But should there be another emergency situation such as the virus, we need to have something to fall back on, and reserves are important for us,” Polimeni said.

Polimeni also underscored that residents should be mindful that the belt-tightening isn’t due to fiscal irresponsibility.

“We’re going to do our best to minimize the negative impacts of the virus to services and any potential layoffs that may have to occur,” Polimeni said.

Mootooveren said officials are continuing to work on a safety plan that would allow for an in-person public hearing, which would be the first since the City Council shifted to remote meetings in mid-March.

Lawmakers will also be tasked with hammering out a deal during a time of heightened tension between City Hall and the City Council — and each other.

Mootooveren has contended that City Hall has cut lawmakers out of the decision-making process on several issues this summer, including allocation of federal stimulus funds.

He was silent for several moments after being told McCarthy was preparing to introduce his proposal on Thursday, and said it was the first he had heard of the announcement.

“I encourage the mayor to involve the [City] Council,” Mootooveren said. “Whatever information we need should be communicated to the council. That’s our intention, to work together.”

Perazzo, who has previously lambasted the sharp rhetoric levied by her colleagues and called last year’s budget process “a dog and pony show,” hoped lawmakers and city officials could set their personalities aside as they navigate what’s likely to be a difficult road ahead.

“I would hope everyone would come to the table without their pet projects in mind and realize we’re in this very difficult position, and residents are in a difficult position,” Perazzo said.

Mootooveren said lawmakers have simply been assertive this summer in calling out a perceived lack of transparency.

“It’s a healthy process that some of us are expressing our view openly about some of what goes on and we’re hoping it will change,” Mootooveren said.

McCarthy said City Hall has been transparent, and plans on making a formal budget announcement shortly.

“I would question where people have said we have left out or not provided information,” McCarthy said. “The record is quite clear that we have provided ongoing information, and sometimes provided it multiple times to members of City Council.”



Possible solutions:
1> End all diversity programs
2> Let the state enforce all drug and prostitution laws.
3> Cut salaries of all employees
4> Over time goes to lowest seniority employees
5> Protesters provide their own security


Go back to the $87 million budget that you had when you became mayor and you’ll save $25 million. McCarthy promised 18% property tax cut and prosperity from the casino money. He never delivered on his promises and waisted the money on failed projects like Smart City & the Sidewalk program. He hired more goons that he sends out to harass and ticket property-owners and hired paper-pushers that invented a permit & a city application for anything and everything, you practically need a permit to wash your windows in Schenectady.

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