The City Council exhales after adopting the new budget. Here’s what we learned from the process:
The Yonkers City Council unanimously passed the FY2026/2027 budget late Friday afternoon. It will now cost more than $1.6 billion annually to operate Yonkers city government and the schools. The new budget is roughly $100 million more than last year’s.
After the vote, Council members appeared to collectively exhale after having held their breath for a long time. They seemed relieved that the budget ordeal was finally over and that the real possibility of having to adopt a truly terrible budget had been avoided.
Last-minute $55 Million Aid from Albany
The Council congratulated itself on their hard work and their ability to cut Mayor Spano‘s proposed tax rate from 5.25 percent to 4.75 percent–even though the reduction appeared to be not the work of the Council but the result of a late infusion of approximately $55 million in additional state aid.
The councilors thanked the city’s finance department’s team, Governor Kathy Hochul, Senate Majority Leader Andrea Stewart-Cousins, and the city’s entire state delegation of elected officials for helping to secure the aid from Albany. They emphasized that this was an exceedingly hard budget year, and although they didn’t like raising taxes, they were proud that they were able to adopt a budget that fully funded the schools, preserved city services and avoided layoffs. Some of them did, however, lament the closing of School 21, as part of cost savings associated with restructuring the school’s budget.
Property Taxes will Rise 4.75%; Residents Unhappy
The Council seemed to downplay the large tax increase, and if social media postings are an indication, there are many disgruntled property owners out there who believe that taxes are intolerably too high, and they’re making their voices heard.
Lessons Learned this Year
The new budget is certainly not a win for the taxpayers. Here are my initial takeaways after closely following and writing about this year’s budget proceedings:
- The cost of running Yonkers government is extraordinarily high.
Even Mayor Spano has acknowledged that Yonkers is an expensive city to operate. A substantial portion of the budget is tied to employee salaries, pensions, healthcare, and other labor-related expenses. In addition, the $1.6 billion budget excludes the capital budget that’s used for infrastructure borrowing and other long-term expenditures. These costs continue to rise faster than the city’s recurring revenue base. - This is essentially a status quo budget that costs taxpayers more.
Residents will largely receive the same level of services they currently receive, but property owners will pay more through higher taxes and increased fees, including water and sewer charges. In other words, the city is paying more to maintain the same government. - The city’s major expenses are growing faster than revenue.
Pension obligations, health insurance costs, school transportation expenses, and other mandated spending continue to increase rapidly. The city has limited ability to control many of these costs without reducing the workforce or cutting services. However, there appears to be no appetite among our elected officials to take a hard look at the size of the government. - Yonkers appears to face a recurring structural fiscal imbalance.
Every year, spending pressures seem to outpace the growth in recurring local revenue. The city continues to rely heavily on state aid, tax increases, fees, rainy day savings, and other temporary fiscal measures to balance the budget. While the Finance Department deserves credit for managing the budget under difficult circumstances, that is not the same thing as building a secure financial foundation that can reliably pay for the costs of our government every year. - Government accountability and transparency must become a larger part of the budget debate.
Taxpayers have a right to know not only how much money the government spends, but whether that money is being spent effectively and responsibly. There was very little discussion during this year’s budget hearings about independent performance audits, operational reviews, or measurable standards for evaluating whether city departments are operating efficiently. That does not necessarily mean there is widespread waste or abuse, but the absence of rigorous public auditing and transparency naturally fuels public skepticism. At a time when taxpayers are being asked to absorb continual increases in taxes and fees, City Hall should place greater emphasis on accountability, transparency, and identifying wasteful or unnecessary spending wherever it exists. Good government requires more than balancing the budget on paper — it also requires demonstrating to the public that taxpayer dollars are being managed carefully and spent wisely. - The City Council budget hearings remain difficult for the public to follow. The budget documents are highly technical, the hearings move quickly, and the process can be extremely difficult for average residents to fully understand. The Council needs to do a better job at explaining the budget process and communicating the Council’s analysis to taxpayers.
- Taxpayer frustration is rising.
There are increasing numbers of residents across the political spectrum asserting on social media that Yonkers’ tax burden is becoming unsustainable, especially for retirees and people living on fixed incomes. Unlike the government, individual households cannot continuously spend beyond their means and then appeal to Albany for financial assistance. - The New York State budget process remains deeply flawed.
This year’s state budget was almost two months late and loaded with unrelated policy disputes that complicated negotiations and delayed passage. The opaque “three people in a room” style of negotiating major budget decisions remains alive and well in Albany. - Yonkers benefited enormously from political influence in Albany.
Senate Majority Leader Andrea Stewart-Cousins, who represents Yonkers, remains one of the most powerful figures in state government and plays a central role in negotiating the state budget. Yonkers clearly benefited this year from having powerful advocates in Albany. - Yonkers is heavily dependent on Wall Street and the broader state economy.
State revenues were particularly strong this year largely because Wall Street performed well. That gave Albany greater flexibility to increase aid to municipalities like Yonkers. But during an economic downturn, the state may not have the ability to provide the same level of assistance. At some point it is likely that Yonkers will be forced to confront its long-term fiscal instability with fewer outside resources available. Much of the new aid that Yonkers received this year is temporary and there is no guarantee it will be available in the future. - Mayor Spano demonstrated considerable political skill this year. Kudos to Mayor Spano: he played the Albany budget game effectively and secured substantial additional aid for Yonkers. Politically, the administration can now claim it protected schools, preserved services, avoided layoffs, and reduced the size of the proposed tax increase. However, the underlying structural pressures facing the city remain largely unresolved, meaning next year’s budget battle may look very similar.
- Downtown redevelopment alone is not solving Yonkers’ fiscal challenges.
Redevelopment projects are clearly increasing economic activity and generating some additional revenue through property taxes, PILOT agreements, income taxes, and related growth. However, at least for now, that revenue is insufficient to offset the rapidly rising costs of the government. “Hollywood on the Hudson” has yet to generate enough revenue to make a difference. - A future recession could create a very painful budget environment.
If a recession significantly reduces state tax revenues, Albany may no longer be able to continue increasing aid to municipalities at current levels. Yonkers would then face difficult choices involving larger tax increases, service cuts, layoffs, or some combination of all three. Meanwhile, the city has steadily drawn down portions of its reserves in recent years, reducing its margin for error during a future economic downturn.
I could probably come up with a few more lessons from this year’s budget cycle, but lucky 13 seems like a good place to stop. In a future column, I may attempt a deeper analysis once there is more time to fully digest the numbers.
Back in February, I predicted the final property tax increase would land around 4.5 percent. I came fairly close, although it gives me no bragging rights. My prediction was based primarily on three assumptions:
- Mayor Spano would successfully lobby Albany for additional aid.
- Wall Street’s strong performance generated more state tax revenue than projected.
- Senate Majority Leader Andrea Stewart-Cousins would successfully push for additional aid benefiting Yonkers, particularly after Governor Hochul was also seeking to increase funding for Buffalo.
All three assumptions turned out to be correct this year.
But as the old investing disclaimer warns, past performance does not guarantee future results. Yonkers survived this year’s budget cycle, but there are no guarantees about what FY2027/2028 will bring — and that budget battle will arrive sooner than most people think.
