Buffalo Acting Mayor Chris Scanlon’s proposed budget for the upcoming fiscal year was put under the microscope, Monday.
The Buffalo Fiscal Stability Authority (BFSA) found the budget to be “incomplete” and noted several issues including a lack of reserves for unexpected spending needs and uncertainties surrounding projected revenue.
The authority, which acts in an advisory capacity, approved a resolution asking the Scanlon administration to provide a so-called “gap plan” to account for what it calculated to be a potential $40.9 million budget deficit for 2025 to 2026, based on multiple revenue assumptions made in the city's proposed budget.
"We can't say for certain that they have a balanced budget," said BFSA Secretary Frederick Floss. "In past years they had reserves, so that if they were off, to some extent, they would be able to cover it. This year they have no reserves."
Last week, Buffalo Comptroller Barbara Miller-Williams raised that same concern, calling the recommended budget a "financial tightrope" with no cash put aside for unexpected shortfalls.
Though the city has approximately $50 million in a "rainy day fund" that cash can only be accessed in specific circumstances and is a "crisis fund," according to Floss.
Floss said a gap plan helps the city prepare for economic risks, including potential federal funding cuts and rising inflation, as well as the possibility the state may not support two of Scanlon’s proposed revenue-makers - the 3% hotel occupancy tax or the creation of a Buffalo Parking Authority.
"That's what we're really doing. We're helping the city plan for the future in case there's a problem, and that's what control boards do," Floss said.
The BFSA noted $29.9 million in projected revenue depends on state approval of both the hotel tax and the sale of parking ramps, which the city does not yet have. A letter obtained by BTPM NPR from Erie County Executive, Mark Poloncarz, to BFSA also expresses reservations about the city's planned sale of the ramps.
Uncertainties surrounding $11 million in projected casino revenue due to the expired agreement between the Seneca Nation and the state, plus increasing police and fire department overtime costs add to the potential financial pitfalls the city could face this upcoming fiscal year, according to the BFSA.
Floss suggested some possible ideas the city could include in its gap plan to mitigate potential shortfalls.
"They could propose a higher property tax in this upcoming budget. They could look at cutting services, they could work with the county, for example, to talk about sharing different services," he said.
After the meeting, Scanlon said he has “no problem” providing a gap plan, but when asked whether that might include cuts such as layoffs for city workers, he doubled down on state support of the hotel tax and parking authority legislation.
"I'm not going down the route of layoffs right now," he said. "We'll do everything we can to avoid that situation, obviously. If our state legislators partner with the City of Buffalo and give us the tools that we need, we won't be in this situation. It's that simple."
The Buffalo Common Council will hold a public hearing on the proposed budget April 29 at 5:30 p.m.
