Apr 10
2025
The good and bad in Scanlon’s budget
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Acting Mayor Chris Scanlon in City Hall. Photo by I’Jaz Ja’ciel
Acting Mayor Chris Scanlon’s first budget proposal is balanced with $30 million that may not materialize, absent cooperation from lawmakers in Albany.
His $622 million spending plan also depends on upticks in the cost, enforcement and collection of city fees and fines that often have fallen short of expectations.
Its viability also swings on a dramatic reduction in overtime costs, which in recent years have gone nowhere but up.
In short, Scanlon’s budget shares many characteristics with those of Byron Brown, his predecessor: some rosy revenue assumptions, a one-shot cash infusion that may not pan out, and a pledge to hold down personnel costs without layoffs.
Not that Scanlon had much choice. This was never going to be an easy budget year for the city.
For nearly a decade before the COVID pandemic, the Brown administration and the Council on which Scanlon served relied on reserve funds — built up under the oversight of the city’s state-imposed fiscal control board — to keep the city afloat.
When those reserves ran dry, Brown and the Council propped up city finances with federal pandemic relief dollars.
Over the past dozen years, city reserves and federal pandemic money pumped more than $300 million into the city’s general fund, from which the city pays basic operating costs. That’s an average annual imbalance of $25 million per year between revenues and expenses.
When Brown resigned in October, his administration left the city with a $17 million operating deficit in the current year and “a structural deficit that exceeded $70 million” for the 2025-2026 budget year, Scanlon wrote in the introduction to his spending plan, submitted Tuesday to the Common Council.
Earlier estimates of the looming budget gap had ranged from $40 million to $60 million. Scanlon did not explain the increase in the projected deficit.
To address the current year’s deficit, Scanlon and the Council swept the last of the city’s federal pandemic relief money — $17.2 million, much of which had been earmarked for community groups — into the city’s general fund. Scanlon also ordered a “soft hiring freeze,” which left scores of budgeted staff positions unfilled, as well as other cost-saving measures.
The belt-tightening continues in Scanlon’s proposed budget. The $622 million in spending represents a modest increase of $5 million over last year’s budget — less than the rate of inflation.
But, as Scanlon told The Buffalo News last month, the city’s primary financial challenge is not cutting costs. It’s raising revenue.
Finding money now
Scanlon’s spending plan includes increases in a number of recurring revenue lines. Some are within the city’s control, others aspirational.
The proposal raises the property tax levy by 8 percent, resulting in $13.7 million in new revenue for the city. That translates to $140 more for a house assessed at $150,000, according to Scanlon’s office.
Scanlon’s four-year financial plan, submitted alongside the annual budget proposal, projects more modest tax hikes in each of the following three years. By 2029 the city would collect $35 million more in property taxes than it expects to raise in the current budget year, which ends June 30.
Last year Brown proposed a 9 percent tax hike, which the Council — with Scanlon as its president — reduced to 7.5 percent.
Scanlon’s budget proposal also projects increases in some revenue lines that, while small individually, taken together could cause problems for a cash-strapped city if reality fails to meet expectations.
Donate to support our nonprofit newsroomFor example, fees for various licenses and permits are projected to bring in $8.1 million next year, which is 55 percent higher than the $5.2 million the city projects those revenue lines will generate this year. Scanlon and the Council have proposed raising some license and permit fees, which accounts for some but not all of the proposed increase.
Likewise, the Scanlon budget forecasts the city collecting $16.5 million in service charges. That’s $2 million more than the city expects to generate by the end of the current financial year. The projection hinges on increases in revenue from street parking and rental registration fees, both revenue lines that have underperformed in recent years.
Street parking, for example, was budgeted to generate nearly $5 million in the current year. As of April 6, it had generated less than $1.5 million.
Scanlon’s budget projects parking meters will generate $4 million in the year ahead — less than last year’s budget line, but still a bit high, given current, actual revenues. Achieving that number would likely require increasing on-street parking rates — a measure city lawmakers rejected last year.
$30 million requires state approval
There are two revenue generators in Scanlon’s budget that require approval from Albany, as well as city lawmakers.
The first, a hotel bed tax, would be a source of recurring revenue. Scanlon’s budget counts on it contributing $3.4 million to the general fund next year.
The new tax requires the approval of state lawmakers and the governor.
Brown lobbied for the same tax last year, but his proposal went nowhere in Albany. Assembly Majority Leader Crystal Peoples-Stokes introduced the necessary legislation, but her bill currently has no co-sponsors. No state senators have expressed support publicly.
The second, the sale of four city-owned parking ramps to a yet-to-be-established public parking authority, is the big one-shot cash infusion that keeps Scanlon’s budget in balance.
The sale, which also requires action from the state Legislature and governor, would bring in between $40 million and $60 million, Scanlon has said. The budget he submitted Tuesday assumes the sale of city-owned properties will generate $28 million for the general fund next year — most of which would come from selling the parking ramps.
Peoples-Stokes has introduced legislation to create a parking authority, which would borrow money to buy the ramps and use the proceeds to pay off the debt. The authority would share profits, but the city’s take would be substantially less than ramps currently earn for the city each year.
That bill also currently lacks Assembly co-sponsors or Senate supporters.
One of Scanlon’s rivals in this year’s mayoral election, state Sen. Sean Ryan, has expressed doubts about the hotel bed tax and the sale of the city’s parking ramps — both their wisdom and the likelihood of state lawmakers adopting the necessary legislation. Scanlon has responded by accusing Ryan of playing politics with the city’s financial health.
The chair of the Council’s Finance Committee, Fillmore District Council Member Mitch Nowakowski, has doubts, too.
Nowakowski, a frequent critic of Brown’s use of one-shot revenues to balance city budgets, told Investigative Post he’s “extremely skeptical” about whether the proposal “is a sustainable financial and planning solution” to the city’s budget problems.
“Yes, the state could authorize a potential authority to bond up to $40 million for the sale of them, but there needs to be an analysis of what a buyer would purchase them for,” he told Investigative Post. “Such as what is the value of them in comparison to the repairs needed and value impacts of the ramps with downtown’s loss of 25,000 commuters.”
He cautioned the city against the temptation to accept “any deal, even a bad one,” in order to fend off the current fiscal crisis.
Cutting runaway overtime
On the expense side, Scanlon’s budget is conservative — and, given his success holding the line on costs in the past six months, perhaps less aspirational.
The exception is his $24 million allocation for overtime.
As of April 6, with nearly three months left to go in the budget year, the city had already spent $28.3 million on overtime, mostly for police, fire and public works employees.
The lowest actual overtime cost in the past four years was $27.3 million in the budget year that ended June 2021.
In the budget year that ended June 2024, overtime cost the city $41 million — more than double what the Brown administration and the Council budgeted.
In fact, between 2021 and 2024, the city spent $52 million more on overtime than budgeted.
Nowakowski, the finance chair, said he’s concerned that Scanlon is continuing the city’s past practice “of habitually budgeting overtime lower … with the actual numbers a year later coming in higher.”
“With so many revenue variables and maintaining cash flow, this remains a serious concern,” he said.
Scanlon, asked specifically about the city’s overtime budget, told Investigative Post in December that he would put an end to the practice of lowballing expenses in order to make budget proposals appear balanced.
“It doesn’t do us any good to cut [costs] on paper, and then at the end of the year, have to pay for them somehow,” Scanlon said.
“I used to ask commissioners every year during budget, ‘Is this the number? Please don’t give us a fake number. Don’t come in and say it’s going to be seven if it’s going to be 10, because you’re creating a $3 million hole.”
Asked this week, how he would achieve reductions in overtime, Scanlon in a statement said his administration “is actively implementing cost-saving measures to better manage OT spending.”
“This includes improved oversight of acting time, work assignments, and staff call-ins,” Scanlon said. “A directive to supervision has also been issued to reduce or eliminate OT with a stronger focus on critical mission work, work prioritization, and encouraging the use of comp time when possible.”
The Council begins its budget deliberations next week. The Buffalo Fiscal Stability Authority is scheduled to meet April 28 to review Scanlon’s proposal.
