Tonawanda officials warn of roughly $3 million shortfall as budget options include cuts or tax changes
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Summary
City officials at a March 24 special meeting flagged a projected multimillion-dollar hole in the 2026 budget, debating service cuts, privatizing sanitation with a user fee and whether to pursue a local law to exceed the tax cap.
City of Tonawanda officials warned that the municipality could face a multimillion-dollar shortfall as they began an early review of the 2026 budget during a March 24 special meeting.
City Treasurer (speaking at the meeting) said the city was facing a significant gap, telling council members, "we're looking at a $3,000,000 hole." The treasurer and department leaders walked council through line items where cuts might be considered if new revenue does not materialize, citing rising fuel and utility costs and recent overtime from multiple structure fires.
The discussion focused on trade-offs: retain current service levels and raise revenue, or reduce services. The treasurer framed the choice plainly: the city must decide between maintaining high service levels or accepting lower taxes with fewer services.
Officials reviewed candidate reductions and revenue options. Potential cuts discussed included volunteer fire program support (budget lines totaling about $49,600), cemetery capital (approximately $7,000), a $5,000 homeless initiative line, snow-and-ice staffing and material cuts, summer pool operations and the senior center. Members also flagged that privatizing sanitation might yield long-term savings but would likely shift costs to residents through a garbage user tax fee on property tax bills; as the mayor described it, the user-fee model would "go on your taxes" rather than direct billing to individual households.
Council and staff emphasized that state aid remains uncertain. The treasurer said the city should not assume higher state allocations when planning future budgets; members noted a recent $300,000 boost and a possible $900,000 figure in state budgets, but cautioned that the larger amount should not be banked until finalized.
The mayor and development staff urged a parallel emphasis on revenue growth through development, saying sales-tax and levy growth were the most reliable levers. The mayor described outreach to developers and utility coordination to clear projects for construction, saying such projects — not one-off grants — are the most durable path to closing structural deficits.
Councilmembers and department heads agreed to continue the review process, including targeted meetings with police, fire and DPW leadership to identify unavoidable costs and to refine options before formal budget adoption steps later in the year. The council also discussed introducing a local law to allow temporary deviation from the tax cap; staff said the tax-cap process requires multiple meetings and public notice and could be completed in two months if initiated promptly.
Next steps: councilors will schedule follow-up department briefings, staff will return with more detailed cost and liability analyses for proposed cuts, and the council will consider timelines for public hearings and any tax-cap local law.
