New York State’s Second-largest City Has Massive Budget Hole

As the New York State Legislature gets closer to finalizing the Empire State budget, towns, villages, and cities all over New York are preparing to start their budget processes.

New York State collects revenue from residents via income tax and distributes part of those funds back to county and local governments to help them provide services to the people. Those state aid dollars, coupled with local property taxes, help ensure potholes are filled, water is delivered, and trash is picked up.

However, county and local governments are under pressure to efficiently manage the money they collect every year, and it seems that New York's second-largest city is finding itself in quite a pickle after officials announced there is likely to be a huge shortfall in the city's savings account.

New York State's Second-largest City Has Massive Budget Hole

In a typical year, the overall budget for the City of Buffalo is around $1.8 billion, with approximately $1.1 billion going to the Buffalo Public Schools and the remaining $600 million or so going to operating the city. Over the last 25 years or so, tax increases have been very rare, with only two happening in the last two decades.

However, according to WGRZ-TV, Buffalo is facing a budget shortage of at least $50 million, and city residents may be eligible for a pretty sizeable tax increase in 2025.

Acting Buffalo Mayor Scanlon has some initiatives on the table that may help raise additional income for the City, including a new hotel tax and selling some of the city's massive real estate holdings. However, those may not be enough to plug this hole in the city's bank account after years of super-low taxes.

City officials will submit their first draft of the 2025-26 budget in early April. At that point, we'll have an idea of how much our taxes are going up.