Ithaca council declines to advance tax-cap override after $2.1M budget error prompts debate
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Summary
After public comment urging fiscal restraint, the council voted not to advance a local law to override the New York state property tax levy limit. The city manager disclosed a $2.1 million erroneous revenue line in the proposed 2026 budget and outlined stop‑gap measures and follow-up meetings to address the shortfall.
The Ithaca Common Council Committee of the Whole declined to advance a proposed local law to override New York State's property tax levy limit following public comment and extended council discussion about the city's finances.
Public commenters urged restraint. Resident Andre told the council he opposed the override and warned that "if you raise taxes more than inflation in perpetuity, you create an unsustainable tax situation." David Bargain and John Graves urged the council to avoid exceeding the cap and to pare back spending. Resident Anne Sullivan blamed long-standing fiscal mismanagement, called for a permanent controller and noted she had to withdraw savings to pay taxes.
Council members split on the procedural motion to advance an override. Alderperson Nguyen said he was "voting for it solely for the flexibility" but did not commit to exceeding the cap. Alderperson Matos said she would vote in favor of moving the item for discussion; several other members said they would not support an override. The motion to advance the local law failed on a roll‑call vote and therefore will not move to the council voting meeting.
After the vote, the city manager briefed the committee on a budget error discovered in the proposed 2026 budget. The manager said "an incorrect revenue line was inadvertently included in the final proposed budget" after a data synchronization issue during the city's transition to the OpenGov budget platform. The erroneous line totaled $2,100,000 and did not represent actual expected revenues.
Administration described a preliminary list of stop‑gap budget adjustments intended to close the $2.1 million gap while limiting use of the city's fund balance and preserving staffing and programs "to the maximum extent possible." The manager said staff met with city leadership and will meet again with a finance task force Friday at 3:30 p.m.; the council will review the final plan during a budget meeting next Wednesday at 6 p.m. The administration said it will set milestones to develop a financial policies document by the end of 2025.
The committee's discussion and the administration update emphasized that additional staffing in the finance/comptroller function and rigorous review of the proposed numbers will be necessary before the council considers any tax increases or amendments. The council chair closed the item and scheduled follow-up meetings to finalize proposed budget changes.
