County manager outlines tentative 2026 budget, highlights Medicaid and daycare funding risks and 0% tax-levy proposal

Schenectady County Manager Fluman told the Ways and Means Committee on Sept. 30 that the tentative 2026 budget carries significant mandated costs and risks from state and federal changes, while proposing a 0% increase in the county property tax levy.

"0% increase that I'm suggesting," Manager Fluman said as he summarized revenue and spending assumptions for 2026. He told legislators the budget is driven by mandated programs — including Medicaid, child care supports, foster care and justice-related services — and that several federal and state changes could alter the countyexposure next year.

Why it matters: Fluman said the county's Medicaid share for 2026 was budgeted at about $38,400,000 and described that exposure as a large portion of county financing. He warned that federal and state shifts could increase local costs and said counties statewide would face similar pressure if higher-level policy changed.

Key budget details and risks

- Medicaid exposure: Manager Fluman said the county is budgeting roughly $38.4 million for Medicaid-related costs in 2026 and described that as a major exposure for the levy and for sales-tax-funded revenues. He cautioned that changes at the federal or state level could increase that obligation and said Schenectady would not be alone if that occurred.

- Daycare block grant and equalization: County staff said Schenectady has high utilization of state and federal daycare block grant funds and that the county served 1,488 children in 2024 (an increase of 213 from the prior year). The manager presented an expected $18 million in state and federal daycare revenue for 2026 against an anticipated about $22 million in daycare spend, leaving a roughly $4 million shortfall if equalization payments from the state do not recur. "There are about 20 counties in the state of New York that have stopped [supplementing daycare]," Fluman said, describing broader pressure on daycare funding flows.

- SNAP/TANF administrative changes and staffing: Fluman said federal rules will require additional work on "able-bodied adult without dependent" (ABOD) assessments and that he is budgeting 2.5 full-time equivalent positions to handle new screenings and the expected increase in in-person visits. He also said recent changes will reduce federal administrative reimbursement from 50% to 25% for some food-program administrative costs, a cut he estimated would be roughly a $200,000 hit.

- Pharmacy and retirement costs: The manager highlighted health benefit costs. He reported county pharmacy spending of approximately $7.0 million in 2024, $8.1 million projected for 2025 and a proposed $8.4 million for 2026. Retirement costs and employee health benefits were also noted as continuing upward pressures.

- Other mandated services and departmental highlights: Fluman reviewed several mandated programs and operational items: 87 caseworkers in children and family services; 218 children in foster care in 2024 (down from 244 in 2023); early intervention and preschool therapy caseloads (888 preschool children case-managed and 756 children aged 03 receiving therapies); ongoing road maintenance (about 210 county highway miles and 40 miles of full pavement completed last year); jail capacity (400 beds, typically under 200 inmates) and planned roof work for the jail in 2026; library-system improvements and expanded hours; and nursing-home operations, including conversion of 40 beds to a Medicare-reimbursed rehab unit.

- Capital and technology requests: The presentation included a proposed $1.7 million computer-aided dispatch (CAD) system upgrade for the Unified Communications Center (UCC), described as partly grant-funded. Manager Fluman said the CAD upgrade would reduce dispatcher training time and improve integration with mapping and ambulance systems. The budget also shows a proposed 30-year lease for a new county office building with an approximate value discussed in the presentation of $60 million; the manager and staff described how that lease interacts with county accounting under GASB standards and with a nonprofit financing conduit.

Discussion and committee reaction

Legislator Paterne, chairing the committee portion of the meeting, praised the work on the tentative budget and the proposed 0% levy. "I just applaud you and your all your effort, for putting the time and effort in," Paterne said. Several legislators asked for more detail on Medicaid exposure, daycare equalization and the county's fund-balance trend. Manager Fluman and Commissioner Falatico (finance) provided clarifications including the county's reliance on sales-tax revenue, casino and hotel-occupancy projections, and settlement revenues (opioid/tobacco) that have declining future distributions.

Operational staffing items noted in the presentation included two added public-safety dispatch positions at the UCC, and two new sheriff patrol officers included in the tentative budget. Fluman told the committee the county is recruiting dispatchers and that mandated overtime remains a concern in busier months; he said staffing and a CAD upgrade are both part of the county's strategy to reduce dispatcher burden.

What was not decided

Committee members asked many technical and follow-up questions, but the Ways and Means meeting was a presentation and Q&A on the tentative budget; the legislature will take further votes only after the scheduled public hearing and subsequent committee work sessions. No formal budget adoption occurred at the Sept. 30 committee meeting.

Next steps

The public hearing set by the separate special meeting is scheduled for Oct. 14. Manager Fluman and finance staff said they will update the legislature as fiscal-year 2025 actuals close out and as the governor's executive budget becomes available in January; staff noted some line items (daycare equalization, Medicare/Medicaid policy changes) could change materially based on state or federal actions.