With Buffalo’s projected budget crisis approaching $70 million and becoming a major talking point in this year’s mayoral election, one of the candidates — State Senator Sean Ryan — is proposing using deficit financing bonds, issued by the city’s control board, to stabilize Buffalo’s fiscal picture.
Ryan’s proposal comes against the backdrop of severe criticism on the city’s 2025-2026 budget as offered by Acting Mayor Chris Scanlon. Critics include Buffalo Comptroller Barbara Miller-Williams and Erie County Executive Mark Poloncarz, among others and the level of concerns about the budget package have been ratcheted up in recent days.
Ryan is suggesting that the city’s control board sell deficit financing bonds while also working on a four-year long-term solution to the Buffalo’s fiscal woes. It is the same model used by other municipalities including the city of Olean and Yonkers.
"Authorizing the control board to issue the bond would stabilize the city's finances in the long-term," said Ryan. "The city will be able to use the reoccurring revenue such as revenues from the city's parking ramps, which generate about $4.5 million a year, to pay for the bond over time. Deficit financing bonds are a tool to help local government resolve their structural imbalances, so they can focus on long term budget stabilization."
Scanlon however, discounted Ryan’s proposal.
"The senator's out there talking simply about borrowing more money, and adding onto our debt with interest costs and things like that," said Scanlon. "If I'm being honest, I think it's laughable."
Ryan said by using the city’s control board, bonds would have a lower interest rate because of its Wall Street rating of A-plus and carries less debt than Buffalo, which also has an A-plus rating from Fitch Rating Service but carries more debt.
Scanlon still sees this as adding on to Buffalo's financial issues.
"I hear from the state senator and others all the time about some of the creative proposals we've come up with to rectify the budget as 'gimmicky' or 'one time infusions of cash,'" said Scanlon. "Then the senator turns around and wants to borrow more money and more costs associated with it."
Scanlon’s budget proposal includes raising property taxes by at least 8%, plus selling the city-owned downtown parking ramps and instituting a Buffalo-only hotel bed tax. All of those proposals have received strong criticism from Scanlon’s political opponents and some in the business community and private sector. The latter two also need state legislature approval, which it currently doesn't have.
"Every year, 'the cannabis revenue is going to save us, the gambling revenue is going to save us, the federal government is going to save us,' and every year when we restart the year, we restart in another huge debt," argued Ryan. "As proposed now, the city will run out of cash by the end of the year, and we'll be back here in a year from now, saying 'I can't believe we're in debt, and I don't even know what my debt is.' We got to get out of this cycle."
Ryan’s proposal would also need approval from state lawmakers before the control board could go to Wall Street. Ryan said he believes that approval could happen in just a couple of months, if not sooner.
