City Budget Director Chris Wagner said Rochester's budget is like a stool that the city sits on. The three legs fund the majority of the city’s services.
“The primary parts of that three-legged stool are property tax, sales tax, and state aid,” said Wagner.
Wagner said the city’s property tax collections are not a big part of the gap, but the other two legs are wobbling, which led to the $64 million shortfall.
About a third of the gap is because of lower sales tax revenue. It's down sharply, largely because of businesses closing due to the pandemic. Mayor Lovely Warren's budget proposal balances that gap in part by raising taxes, cutting services, and laying off more than 200 people.
But the city had budget issues long before that. Wagner said they expected to be short roughly $40 million dollars, which he says comes from how the state doles out aid.
“If we were to get the same aid per capita as Syracuse, we’d get about another $15.4 million annually,” said Robach. “And if we got the same aid per capita basis as Buffalo we’d get about another $41.6 million annually."
He says he’s not sure why the city receives less aid but it's an issue that the city has been lobbying to change for years.
Those prospects are tougher now with the state facing major budget deficits of its own.
Wagner also said more tough choices are on the horizon. His 5-year projections say this year’s gap is the floor. After factoring in inflation, pensions, medical costs, and the likelihood that that state aid remains flat, he says that deficits could reach $84 million by 2025.
“It’s a big number to try to overcome. I’m not going to try to sugarcoat it. So we’re hoping for the economy to turn around a little quicker than predicted, but we’ll have to wait and see.”
City Council is scheduled to vote on the budget next month.