Cayuga County budget director Lynn Maranello told the Cayuga County Legislature at a special budget meeting that, under current assumptions, the county is starting the 2026 budget process with a roughly $9.5 million budget gap.

Maranello said the county is beginning 2026 with an assumed 3% sales tax increase, a 2.87% property tax cap (the current estimated tax cap) and a starting fund‑balance use of zero. “With that in mind, that would put us with a budget gap of 9,500,000 to start with for this 2026,” she said.

Why it matters: a gap of this size would require either service reductions, revenue increases or use of reserves. Maranello told legislators the county’s recent expenditure increases have outpaced revenue growth and that several mandated and market‑driven costs are beyond local control.

Maranello walked legislators through the main drivers. She said the county saw a large one‑year Medicaid cost increase in 2024 after federal changes that reduced prior enhancements, and that foster‑care costs are contributing to another large increase in 2026. She also cited higher salary adjustments in 2024 for road patrol and jail staff and rising hotel expenditures tied to homelessness response. “We basically went up a million dollars in Medicaid all in 1 year,” Maranello said. She added that foster care and homelessness costs are “growing exceedingly fast.”

Health insurance costs were flagged as a persistent pressure. Maranello said the county saw roughly a 12.7% increase on its Excellus BlueCross plan and a roughly 40% increase on a PPO plan in prior years; the county’s health consortium is projecting another 14% increase for 2026. She also noted retiree health insurance currently costs more, in aggregate, than active‑employee coverage.

On revenue, Maranello showed sales tax history and said sales tax produced a large revenue spike in 2021 but has been relatively flat since. She told the legislature that in 2024 county expenditures rose by about $15 million while revenues rose by about $10 million, widening the structural gap between spending and income.

Maranello presented alternative scenarios for closing some of the gap via property tax changes: a 7% levy increase would reduce the gap to about $7.7 million and a 10% increase to about $6.3 million, while reiterating the current estimated tax cap is 2.87%.

She also reviewed fund‑balance history and cautioned the county’s unrestricted A‑fund balance has been drawn down in recent budgets. Auditors, she said, must assume the county will use the full $5.5 million reserve set aside in the 2025 budget, which reduces unrestricted balance on the books. Maranello and finance staff will finalize a 2025 performance projection in the coming weeks to clarify how much fund balance might be available for 2026.

Maranello noted two large bond payments mature in 2028 and 2029; those payments will drop from the budget in subsequent years if paid down as scheduled, which could affect long‑term planning for large capital items such as county facilities.

Discussion and next steps: legislators asked clarifying questions about fund‑balance use and the realism of starting with zero planned draw. Maranello said the final 2025 projection — to be completed in the next two weeks — will determine whether a modest planned draw (she said “2 or 3,000,000”) is feasible. She and finance staff will also check for any 2025 reserve draws enacted by resolution.

Departments will now proceed with their detailed presentations and requests; the overview Maranello gave was intended to establish starting assumptions for the tentative budget process.