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Midyear Budget Deficit

At a glance

  • What: The Administration's mid-year update to the financial plan (presented to the Finance, Assessment and Taxation Committee on August 19, 2026) shows expenditures above the adopted budget, revenues below projections, and a deficit of about $22 million by year end.
  • Where it stands: No vote. The committee asked the Administration for line-item savings, bond, grant and position data. Dixon and Ward said all options are on the table and agreed the deficit cannot be fully corrected this year. A Comptroller review was expected by mid-September.
  • Next: Administration responses to the committee's six information requests; the Fiscal Year 2027 proposed budget (see FY2027 city budget adoption).

What the Administration reported (August 19, 2026)

  • Dixon (Commissioner of Administrative Services) said expenditures will exceed the adopted budget, revenues will not meet expectations, and overtime is a significant cost. Overtime is highest in the Albany Police Department and has not fallen despite hiring, because of vacancies; in General Services it comes from work for events.
  • Fitzpatrick (Interim Budget Director) noted an unforeseen $9 million health insurance expense (see Health Insurance Provider Review) and an invoice from the New York State Comptroller for retirement-related expenses. Projections do not assume a deferred pension payment. The revised deficit includes additional State aid.
  • Ward (Budget Advisor) said specific new revenue proposals would come with the Mayor's proposed budget, that property tax receipts trail projections because additional refunds are expected, and that the Governor and legislators have publicly supported the extra State aid (which Brodie called a handshake agreement, asking about confidence in the two further years). Balarin asked whether the extra $20 million from the State is in the 2027 projections; Ward said yes.
  • Departments were reviewing vacant positions for removal from the FY2027 proposal. The Commissioner of General Services was asked to report on adjusting schedules to cut overtime; Keegan noted the collective bargaining agreement does not prohibit schedule changes.
  • A spending freeze included part of the capital project list; the list will be provided once final.

Questions and positions

  • Keegan: asked for the GL accounts behind each summary category, the plan for the roughly $22 million deficit, and whether a borrowing request should be expected.
  • Brodie: if the City borrows it would be through Revenue Anticipation Notes adding to FY2027 debt service; asked whether the hiring freeze raises overtime, what the Comptroller review would cover (Ward: the letter details it, results by mid-September), and what reporting the State aid requires (Fitzpatrick to follow up on the timeline). Asked what has changed in invoicing hosts of special events.
  • Farrell: asked about the health plan, positions behind announced savings, and confidence in revenue projections, saying the broader community has lost trust in the City's budget projections. Also raised debt (see Debt Policy and Bond Authorizations), the Capital Improvement Plan (which she said must be completely redone; Fitzpatrick said a review is under way), a commuter tax (needs State legislation), the Championing Albany's Potential program (Ward: returns are long-term) and consistent budget reporting.
  • Flynn: asked whether the shortfall in fines is non-payment or over-projection, and why overtime is high.
  • Powell: asked about the health cost increase, grant revenue in FY2025 versus this year, and suggested variances be explained in the report narrative.
  • Zamer: asked about shared services with Albany County (conversations have occurred), earlier public announcement of capital project changes, another significant lawsuit against the City (on the Administration's radar), and rebidding the red-light camera contract (held by the Treasurer's Office).
  • Balarin: called for tougher negotiation with partners and vendors on large expenditures and warned the City may need to begin laying off employees if significant savings are not realized.
  • Public comment: Karl Urich of Albany spoke on the city budget.

Information requested of the Administration (recap by Brodie)

Line-item savings figures for steps taken earlier this year; responses to Brodie's July 23 email; line-item revenue and expense detail; issued bonds and projects not yet bid or likely to be pulled back; which positions are in the savings figures; outstanding grant applications and which funds are expected.

Sources

Log

2026-08-19 - Finance, Assessment and Taxation Committee (5:37 PM to 7:59 PM)

Mid-year financial plan presentation and questioning as above. Committee members present: Keegan (chair), Balarin, Brodie, Farrell, Lumpkin. No vote on this item.