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Schenectady finance committee reviews proposed 2026 city budget; property tax revenue, insurance and health costs cited as drivers
Summary
City finance staff presented a proposed $120 million 2026 budget that officials say is roughly 3.2% larger than 2025 and is driven by higher property tax revenue, rising health insurance and debt-service costs. Council members pressed staff for line-item clarifications and follow-up answers on revenue assumptions.
The finance committee opened its review of Schenectady City’s proposed 2026 fiscal plan on a note from the committee chair calling the meeting to order and asking Commissioner of Finance May McCarthy to give a high-level overview. “The proposed 2026 budget is approximately $120,000,000,” McCarthy told the committee, calling the plan roughly 3.17% larger than the adopted 2025 budget.
McCarthy said the increase is tied largely to property taxes and rising employee-related costs. She told the committee that projected real property tax growth of about $5,949,044 is a key revenue driver. McCarthy also flagged health‑insurance and retirement costs: “MVP health insurance increased by 12.49%,” she said, noting the city budgeted roughly $17 million for health coverage in 2026 versus about $15 million in 2025. Retirement costs were shown to rise roughly $1.1 million in the proposal.
Why it matters: The finance committee and council members focused their questions on whether the revenue assumptions are reliable and how much of the increase reflects one‑time items versus ongoing commitments. Committee members asked for clarifications on sales and use tax estimates, county sales tax receipts, and a recently proposed waste fee. McCarthy pointed council members to supplemental documents in the packet that included fund‑by‑fund revenue and open encumbrances.
Key details from the overview: McCarthy presented a breakdown showing the proposed capital budget at about $11.4 million, with $6.2 million identified for the general fund capital program, $1.9 million for water and $2.9 million for other city capital requests. The proposed general fund asks include a $2.0 million appropriation from fund balance; staff reported an estimated unrestricted fund balance in the vicinity of $4.1 million after that appropriation. McCarthy said the 2026 debt‑service forecast rose by about 6.79%—roughly $632,000—driven by scheduled borrowing and interest costs.
Council follow-up and next steps: Committee members recorded a list of requests for more detailed revenue answers (franchise receipts, parking and camera revenue, and the specifics of a proposed waste surcharge). Staff asked members to submit outstanding questions in writing so responses can be appended to the packet. The committee recessed its review to continue departmental line‑item sessions at a later meeting.
Ending: Staff said they would return with the requested line‑by‑line clarifications and the committee scheduled further review sessions. The finance committee did not take any formal vote during the session; it continued the meeting as a review and question period on the proposed 2026 budget.
