At last Friday's meeting of the Board of Estimate and Apportionment (the mayor, the Common Council president, and the treasurer), it was revealed that the anticipated revenues for 2026, even with a property tax increase that is the maximum allowed by law, there is a gap of $3.27 million between the expenditures the departments requested for 2026 and the projected revenues. In its first pass through the proposed budgets submitted by the various departments, the BEA managed to cut close to $2 million, but a gap of $1,47 remains. It would seem the BEA will have to make deeper cuts to close the gap, because it is unlikely they can, as has been done so often in the past, use the fund balance to close the gap.
And then there is the 2025 budget. The most recent treasurer's report, presented to the Common Council on October 14, shows that the actual revenue in many categories is falling significantly short of what was projected in the 2025 budget. The budget lines for Building Permits, Lodging Tax, Cannabis, and Mortgage Tax in particular seem unlikely to reach the overly optimistic projections made by the BEA last year. Money will need to come from somewhere to close that gap as well.
BEA meets again on Wednesday, October 29, at 2:30 p.m. in City Hall. Click
here for the link to join the meeting remotely.
COPYRIGHT 2025 CAROLE OSTERINK
The City of Hudson spends 2.5x to 3.5x more per resident compared to Kinderhook, Ghent, and Claverack.
ReplyDeleteWhere does the money go? Why is our population going down every year but spending per resident is going up?
Right now there’s an unhealthy budgeting dynamic: some department heads ask for the maximum possible amount, not because they need it, but to guard against cuts. Other well intentioned lobbyist-residents like Peter Frank secure grants independently (Oakdale), that the City then has to match even if the City did not budget for it. Or Council members long gone (e.g. Rebecca Wolff) apply for grants to cover services beyond the scope of municipalities, that then become the City's financial liability (E.g. Michelle Tullo and "Housing Justice").
The city population is steadily declining... our county is the oldest population in the State, why are we adding unionized employees where other cities do not even have a certain offering (e.g. Youth Center).
It’s a classic prisoner’s dilemma that destroys fiscal discipline. The mayor and BEA, and later the city manager, should set a firm budget ceiling.
Unless the number of taxable parcels rises, or other revenue streams actually materialize year over year, spending cannot.
Each department should be told to cut a fixed percentage. That is zero-based budgeting in practice; start from necessity, not habit.
If the City wants to spend money on something the first question is what expenditures will be cut, not what extra tax ought to be levied. (e.g. Sidewalk Tax)
Good ole Home Economics analogy:
Hudson today is like a family where everyone... kids, grandma, nannies, the neighbors (Greenport) spend freely on family-issued credit cards while only one finite checking account and earner, the taxpayer, pays for it all. No one thinks about the big picture.
The family never matches expenses to income, eventually takes a double mortgage to pay off credit card debt, or in Hudson’s case, dips into the fund balance. Then, like many families, it relies on handouts and subsidies or sells off assets.... money from grandma's trust, using College Savings account for expenses today, or temporary relief like COVID stimulus checks, but when that all dries up, dire financial situation follows.
It will take years to right the ship.
The City of Hudson will also have to start the now 8 years delayed city-wide tax reassessment, which will be painful for most and lead to more longtime residents on fixed incomes being forced to leave.
That is Kamal's legacy; he campaigned on keeping Hudson affordable, yet is there anyone more responsible for Hudson's affordability crisis?
The most revealing and stunning question about this election is that not a single candidate (except perhaps Trixie and Margaret) talked about the need to control spending and balance budgets.
References:
Zero-Based Budgeting: A system of budgeting that requires each department to justify its entire budget request from scratch, every year, and not merely adjustments from the previous year’s level.
Project-Based Budgeting: A budgeting method in which funding is allocated and tracked by specific projects or initiatives rather than by departments or broad general line items like "overtime"
I’ll just repeat my comment from April when many of us, including some council members saw the writing on the wall and warned about possible insolvency in 2026. The numbers don’t add up and something has to give. Does Kamal still think Rich Volo should resign, because he was one of those who sounded the alarm? How do you like them apples? This is the one thing I wished we weren’t right about. The next mayor and council are going to face hard decisions (and undeserved blame) because of the years of malfeasance under Tom and Kamal, and the apathy of Hudsonians not to have ran anyone against them until it got this bad.
ReplyDelete“Union Jack: April 14, 2025 at 12:39 PM
A tragic comedy of errors that many of us said would happen a few years back. I and others said they would “kill the golden goose” of Hudson’s economic success (go back and look up Gossips articles and commentary about the STR regulations).
One cannot expect to balance a budget by holding out your hand for taxes in front hospitality and home owners, then go behind them and stab them in the back with unfair assessments, draconian restrictions, and a general anti-business/anti-property owner sentiments.
The lodging tax revenue was indeed projected on the expectations of the tax rate increase of 1% (great), and the expectation of all these hotels opening. But they are so out of touch and non communicative with the industry that they couldn’t see what is obvious if you just walk past the buildings: some are way behind on construction, some were held up by the dysfunctional Planning Board, some have had no work done, and maybe some could get caught up in financing issues with the current economic climate.
The STR restrictions, that were passed without any inventory data or promised studies have eliminated half of the number of rentals, with more to come after the ZBA exemptions expire. It does prevent outside, nonresident investors from buying up property to make small hotels, ok that’s great. But it was an insignificant number of residences, and Galvan and other investors probably own more vacant properties than the 60+ STRs that disappeared. I bet many of these vacant properties are the very same that owe the $2M+ in delinquent property taxes. Furthermore, what are the real benefits and results? Most of these STRs have likely not converted to long term rentals, but have been sold off as weekend homes that now just sit empty and help neither community or tourism. Rent didn’t drop. Lodging and sales tax revenue is down. And now the only lodging options our visitors have is to stay at the few high priced hotels we have, like The Maker. So we’ve eliminated the middle class and budget minded tourists, and our restaurants and retail have changed with that market.
We will also continue to lose long term rental inventory as small time landlords, the backbone of Hudson’s rental stock (multi-family homes), are selling due to increasing property taxes and restrictions like Good Cause. Many friends of mine who are renters have recently told me they need to start looking for a new home because the owner is selling and the new buyer wants to convert to single family. But don’t worry, we’ll have more Luxury apartments from the mayor’s friend and landlord, Galvan, who just so happens to get tax exemptions and also exempt from Good Cause. It just seems like these career politicians and the laws they make just benefit millionaire developers at the expense of regular business and homeowners.
But what more can we expect when 2/3 of the BEA are men of leisure, with no business experience, and histories of owing money to creditors and back taxes (public information, look it up).“
Joe Ferris had stated that one of his first tasks as mayor will be to hire a City Planner. There simply isn't any money for a city planner (or a city manager for that matter). 4 or 5 years ago, Kamal Johnson said he would create a Parks Department. There was never enough money to do this either, but he said it anyway.
ReplyDeleteAfter 10 months, ten $10,000 parking kiosks are still gathering dust and possibly rust in a DPW storage shed, waiting to be useful and increase parking revenue to fund the new Parking Bureau.
Soon the NY State Comptroller's Office may have to pay a visit to 520 Warren.
I've been equally skeptical about this idea of hiring a City Planner for the same reason.
DeleteYou could theoretically convert our Housing Justice Coordinator to a City Planner. The problem is that the position of the Housing Justice Coordinator isn't currently sustainably funded and so it won't solve that problem.
There is another option: NY State vests certain city planning-related advisory powers to local Planning Boards. That includes for example the comprehensive plan which is explicitly listed as something that the PB could develop.
All of this of course presupposes a Planning Board that has a suitable composition of members. Ben Foreman was the last PB member with any background in municipal planning.
If I was mayor in Hudson, I would start the process of realigning this Planning Board so that it isn't just a review board and try to address the issue of a lack of city planning that way.
Amen! The circus that our Planning Board has become a a major source of pain in Hudson. Both slowing development (which I think for the mayor is a feature, not a bug) and for setting us up for costly litigation. How can they even begin to start doing proactive planning work when they, like last night, spent 4 hours of a special meeting continuing an endless review process and accomplished little?
DeleteRosy revenue estimates are the bane of budgetary planning. Budgets should NEVER be based on best-case estimates. Rather, those estimates should be stressed in a material way (10%, 15%) and then used as the basis for planning. Somehow, I don't think the current "leadership" on the BEA (mayor, president), lacking in experience and so sure of their abilities, have been applying this common-sense principle.
ReplyDeleteSo where does this leave us? Bankruptcy is not looming in 2026, I don't believe. What is, however, is austerity. The City has to have a balanced budget. It has to meet its contractual obligations under its union employment agreements. It doesn't have to have anything that federal and state law and its own Charter requires.
But austerity will only go so far. We need to rethink our priorities, clearly. We need to conduct a solid reval of our taxable real property inventory. And we need reasoned and honest leadership in City Hall. Perhaps we'll get it in January.
The city has owned 514-516 Columbia Street for several years, perhaps since the 1990's. The large-ish vacant lot with a large tree in the middle and where a house must have once stood, sits between two houses. DPW occasionally mows the grass and removes the beer bottles and other trash, and they clear the sidewalk of ice and snow when they remember to. The sidewalk is a death trap every day of the year. Have you ever heard anyone at City Hall discuss selling that property to get it back on the tax rolls and out of the city's hands? If that were to happen, who would handle it and not take 20 or 30 years to get it done? The Treasurer? Is Kamal Johnson even aware Hudson owns that parcel? If he is, what has he done in the past six years about selling it? Heck, a current 3rd ward council member lives two doors east of 516-518 Columbia. When in the past two years has she raised a concern to the council about a vacant, city-owned property with an awful sidewalk in her neighborhood? How about never! Has she ever asked anyone at City Hall why the city hasn't sold, or even thought about selling, a vacant property that isn't doing anyone any good and that is nothing more than squandered tax revenue year after year after year? Don't count on it. She probably wouldn't even know who to take her concerns to if she were to have any! How about Kamal Johnson? Are you kidding me?
ReplyDelete