Finance director: midyear budget on track but sales tax soft, FY27 labor costs a key risk

Finance Director Rainer Schwartz presented Albany's midyear budget review to the City Council on Feb. 17, reporting that expenses were at about 50% of the fiscal-year budget while revenues were near 46%.

Schwartz said a recent audit prompted one-time accounting cleanups that produced a notable swing in reported numbers but that those adjustments are not expected to continue: “We ended up realigning both cash and equity,” he said, describing a system cleanup tied to payroll liabilities. He said property-tax estimates improved slightly when the county finalized the assessment roll, licenses and permits are trending higher, and real property transfer taxes and franchise/utility taxes are on track.

Sales tax is the primary area of concern: Schwartz said sales-tax receipts in Albany are not growing robustly and are expected to run about 5% below budget, noting the city does not have a large sales-tax base compared with some jurisdictions. He highlighted receipt timing differences across revenue categories and the need to adjust projections for sources that lag in cash flow.

Council members questioned the fraction of sales tax that comes from online orders and how online allocation flows through county pools; Schwartz summarized the Wayfair-era allocation and said online sales allocations are increasing but are complicated by distribution-center effects and county-pool allocation rules.

On election costs and the introduction of 16‑ and 17‑year-old voter participation, the finance director and clerk gave a round estimate of the 2024 election actual cost near $150,000–$160,000 and said youth voting costs are still being finalized with the county. Schwartz closed by saying staff will continue monthly monitoring and may return in May with adjustment recommendations depending on year-to-date results.

Because this was an information item, no action was required at the meeting.