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Prepared Remarks from Mayor Patrick Madden concerning the Proposed 2017 Budget

October 07, 2016

FOR IMMEDIATE RELEASE: OCTOBER 7, 2016

Prepared Remarks from Mayor Patrick Madden concerning the Proposed 2017 Budget

When the Council and I assumed our respective offices last January we were saddled with a deeply flawed budget. It was another in a long series of structurally imbalanced budgets that over the past decade have seriously depleted our General Fund Reserves. That fact was independently confirmed by an audit undertaken by the New York State Comptroller’s Office last year, the results of which were provided to us this past February. That audit and a series of annual budget reviews over the past several years were very critical of the City’s past budgeting practices. The Council predicted in May that we needed a 19% tax increase based on their independent review.

After careful and detailed analysis, we have confirmed all that and more.

I have repeatedly stated that we have hard choices ahead of us. The time to wrestle with those choices has arrived.

The budget plan I have presented to the Council today corrects the over estimated revenues and the understated expenses of the past. It removes speculative one-shots and realistically accounts for sizeable contractually and legally mandated increases in 2017.

In short, it is a truthful document and it lays bare the magnitude of the challenge before us.

Over the past 10 years as a result of ‘hopeful’ budgeting and one-shot revenues (that mostly did not materialize) we ran deficits that eroded our fund balance by more than $7 million. Our Fund Balance today is slightly more than $1 million and could well decline further in 2016.

This budget plan addresses all of those deficiencies. It is based on facts. Not wishes, not hopes. It is prudent and real.

For too long we have kicked the can down the road. We have based our budgets on hopes rather than facts. We did so to avoid hard decisions. When those numbers failed to materialize, we were forced to dip into our reserves. They are effectively gone. There is no more road left to kick the can down. It is time for us to face reality.

I will not manipulate the budget for political expediency. I will not run this City further into debt. I will not do that to my children or yours.

This is not something that is just now happening. It has been happening for years. What is happening now is that we are shining a light on it and addressing it. We are finally doing something about it.

This budget and the steps we have taken since January address all of the concerns raised by the State Comptroller. We have taken the Comptroller’s criticisms to heart. We have played the hand we were dealt.

There are no quick fixes.

If we had been doing multi-year budgeting, we could have seen this coming and we could have dealt with it over time. We didn’t.
If decisions were based not on political expediency but on sound budget practices this could have been dealt with over time. But they weren’t.

I have purposely avoided talking about the amount of the tax increase up to this point because I want to emphasize the important message here. We have a long-standing historical budget imbalance. We know what its cause is. We have heeded the warnings of the State Comptroller. We have taken the recommended steps to rectify past deficiencies. We are clear on the magnitude and the basis of the City’s financial shortcomings. The price tag for doing this is an unfortunate tax increase of 28%. The impact of that on a home assessed at $100,000 is $28 per month.

On a personal note: I spent the past three decades helping people buy homes. I know the burden of taxes on homeowners. I get the problems that this will cause. This increase is shocking – but it is real. As the final number came into clearer focus over the past week, it was agonizing. My goal in becoming mayor was not to raise taxes. But I promised to be truthful and honest with you.

In my State of the City Address last February, I noted:
We will have to make difficult decisions about our services, about our taxes, and about every aspect of how we spend our resources. In so doing we will create great opportunities for those so inclined to make political hay. It will be easy to score points. There will be many unhappy constituencies. But we will also create great opportunities to show statesmanship and leadership in the pursuit of a noble cause – building a strong financial foundation for our beloved City.

I stand by those words and the commitment I made to work collaboratively with the Council to advance the goal of rebuilding our financial foundation. Troy is a great City with a bright future. This is a solvable problem. We will not be derailed.

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