The city of Syracuse has borrowed more money in recent years as interest rates rise, cause for concern for Auditor Alexander Marion, according to a report issued Monday by Marion’s office.
Marion laid out his concern in a report issued about the city’s 2024-25 budget, which took effect on July 1. In May, the city’s Common Council approved the $341 million budget. It included a 10% increase in spending from the 2023-24 budget.
Among the new initiatives in this year’s budget were: The Syracuse Housing Trust Fund, 23 miles of road reconstruction and 14 miles of sidewalk maintenance and a citywide rollout of covered recycling carts.
The auditor’s 80-page report covers a number of issues the city could face in coming years, including a lack of control over its own revenue. Marion’s report included 15 findings and six recommendations.
The auditor stressed that the budgetary process needs to be more open. The city’s budget is included in a hard-to-access document for residents, he said Monday.
“It’s the people’s budget,” Marion said, “and we need to make sure that the people’s voices are clear and heard throughout the process.”
Here are three takeaways from Marion’s budget analysis.
Increase in borrowing costs
Marion’s report shows the city bonds for more than $41.3 million per year since 2021. In 2020, the city bonded for just $17.1 million.
The bonds allow the city to obtain financing for bigger projects while paying the costs over a fixed term, typically 30 years, Marion’s report said.
This year’s debt payments make up 8% of the city’s total spending.
Marion said that while it is necessary for the city to borrow money, it should be mindful of post-pandemic increases in interest rates.
“We need to be judicious about how we make the choices of what we borrow for and what we pay cash for,” Marion said at a Monday press conference.
Read the full document here:
Lack of revenue control
The increasing costs to pay the city’s debt could be exacerbated by the city’s lack of control of its own revenue, according to the report.
Sales tax, property taxes, federal aid and state aid account for 79% of the city’s revenue. Each of those forms of revenue either are dispersed to the city through a previous agreement or come at the discretion of the state or federal government.
The report points toward the city’s lack of taxable property as a critical challenge in increasing the revenue controlled by the city. Less than 50% of property in the city can be taxed. New York State owns about $400 million in property in the city, most of which is not taxed.
“We do have a tax exempt property crisis,” Marion said.
Council’s $1.5M budget amendments didn’t save taxpayers money
Rather than cut costs earlier this year, the Common Council decided to cut positions included in the city budget to reallocate $1.5 million within the city budget.
According to Marion, because of the cuts, the city will forgo a chief technology officer, a project manager in the auditor’s office and an employee tasked with helping relocate residents from houses in violation of city codes.
City officials had included an employee tasked with relocation in the mayor’s proposed budget after Catholic Charities announced in October it planned to shutter its relocation program. Catholic Charities shuttered the program while Central Current was reporting a story that revealed flaws in the program.
Instead of beefing up city staff, the funding largely went to Home Headquarters, the Onondaga Historical Association and the Greater Syracuse Land Bank.
Some of the funding will also be used in the city’s housing trust fund and the summer youth employment program.
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