Our review of the 2026 Midyear Financial Report

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On August 15th the City of Albany Mayoral Administration released its 2026 midyear report. At Albany Data Stories we are likely one of many people and organizations that have been interested in seeing this report.  The City is in a financial crisis and the Midyear Report will help everyone understand the state of the City’s finances and near-term direction.

Up-front we should thank former Albany Common Council Member Richard Conti.  Conti spearheaded last year’s establishment of a new City Charter requirement for an annual mid-year financial update to the Common Council and Albany citizens, delivered by August 15th.  Without this law in place we don’t know if we would have the current visibility on the City’s finances.  In its first 7.5 months the current Administration has not overachieved on transparency with their plans and their data sharing.

This report has a number of sections. It describes Albany Data Stories’ work examining the City of Albany’s finances and various things that we have been advocating for.  It walks through our comments that we have made on a copy of the Midyear Report pdf. Lastly, the report has a number of specific questions that we wanted the Midyear Report to answer.

As we write this we’re also looking forward to two additional events.  Firstly, the Administration is scheduled to speak at the August 19th Finance Committee and we want to hear any additional context that is laid on top of this report.  Secondly, we are waiting for the Treasurer’s Q2/2026 report which typically comes out at the end of July or beginning of August which could provide additional detail and narrative to the Midyear Report.  Some amount of our questions or concerns may be answered by either of these; it’s also possible that additional questions or concerns may be raised.

One last prefacing comment.  In various forums we have said something along the lines of “the current financial crisis does not have one person to blame - it is a problem created over many years, by many hands - Mayors, Treasurers, Common Council Members, Auditors, and more.”  The current Administration should not be blamed for creating the problem. However they own the problem now.  It is in the context of the current Administration owning the problem (and being the leader in solving the problem) that we make our remarks.

For those who are familiar with Albany Data Stories and our work, feel free to gloss over this section.  If we are new to you, or if you just want a reminder of what we have done please read on.

Albany Data Stories began to examine our City using public data, beginning in early 2025.  Our interest in our City’s budget began as we examined the City’s school speed zone contract.  From that analysis we decided to track and analyze the 2026 budgeting cycle that began in October 2025.  

During that time we…

• reviewed the release of the 2026 proposed budget in Oct 2025 and found the proposed budget to be sloppy and concerning.
• examined our City’s overall financial picture using a tool from the Strong Towns nonprofit
• continued to examine the City’s financial picture and were very concerned.  On 11/17/2025 we went before the Albany Common Council and spoke during the public hearing (1:48:00 mark) and suggested the City needed to cut $8 million from the 2026 budget
• analyzed the Q3 2025 interim financial report (released by the Treasurer in late November 2025) which showed the City’s incredible stress.  Our spreadsheet work showed the City was in an even worse position than what we were seeing earlier in the month.   We spoke at the Finance Committee during the public comment period (1:30 mark) on 12/9/2025 and suggested that the 2026 budget required $20 million in cuts.
• spoke again at the Finance Committee on 1/29/2026.  Coincidentally, later in the meeting representatives from the new Administration spoke and advocated for additional spending to support new headcount.  
• analyzed the City’s property tax picture, explaining our concerns that the low growth in property tax revenue exposed the City to revenue shortfalls that were made up with speculative revenue streams
• advocated for the Administration to bring in the New York State Comptroller’s Division of Local Government Accountability for assistance in this paper and then speaking before the Common Council (2:48:20) 
• created a model that projected out how the City would be faring if the Comptroller updated its fiscal stress score for the City
• have posted other thoughts on Reddit and on our Facebook site over the past few months.

Albany Data Stories is not a commercial entity, we don’t make any money from our work and never will.  We are nonpartisan, our political views are probably best categorized as center-left.  The ADS team has lived in the City for a long time and we want to live in a healthy City.   Our goal is to support transparency, accountability and good decision-making.  And that does require calling out bad decision-making and bad behaviors.

To understand how we analyzed the Midyear Report we first should explain our mindset.  Then we can explain the questions that we hope can be answered by looking at the Midyear Report.

The City of Albany’s finances are catastrophically bad.  There are only 3 levers that we can use that can meaningfully stabilize our finances short-term:

1. Receive more NY State aid - we have received an influx of NY State aid for the current year and a commitment for aid in the upcoming years.  Should the City of Albany get more aid given the volume of tax exempt property in the City?  Maybe.  However our opinion (if we put on our State citizen hat) is that the City should demonstrate that we’re good stewards with the State aid that we’re currently receiving before receiving any more aid.  And NY State is currently $230 billion in debt so we need to be realistic about what the State can contribute.
2. Raise property taxes - The City relies on $64.25 million in residential and business property taxes.  It’s an arguable statement that we’ll make - the City’s property taxes are high but not above average for our area.  The City could raise property taxes by 2% for 2027, and can go above that amount through an override process.  Doing the math on an extreme 10% increase in property taxes would provide an additional $6+ million in property tax revenue which would close less than 20% of the projected 2027 revenue ($230 million) vs spending ($264 million) gap.  Or put another way - property taxes would need to increase by 27% to close half of our 2027 budget gap.  That is obviously not a good decision, we're not going to tax our way out of this problem. 
3. Cut expenses - We preface any discussion about cutting expenses by saying that we are aware that any discussion of expense cuts impacts City employees and programs that benefit citizens.   There are also portions of our City’s budget that are very difficult to cut.  However, expenditure cuts are the only realistic way that we can align our budget; cuts in our budget are horrific but not making cuts and having our City’s finances burn hotter will be even worse.

Channeling some questions that we get... But what about…

• An AirBnB tax? yes, that would be great if we were Asheville North Carolina, an area with 1000s of units regularly rented.  But we’re not Asheville.  We would be wasting our time and energy.  We pick on AirBnB tax proposals as representative of things that sound interesting but they’re a drop in the bucket.  There are many other well-intentioned but fairly useless ways that we can attempt to generate revenue; we want to steer clear of these.
• Championing Albany’s Potential, surely the $200 million investment will drive more property tax-paying property and economic growth?  2032 is the horizon where we should realistically generate revenue from CAP.  It won’t help us now.
• Shared services with the County?  This is worth exploring as a way to get economies of scale, however this is a medium-term play
• Making Albany fun again and getting more sales tax revenue?  Yes, we can generate more sales tax revenue by getting people into Albany regularly for entertainment, restaurants, etc.  We’ve done some back-of-the-napkin math and we see this gets us $1-1.5m in sales tax revenue if we overperform.  Interesting, but it’s not the answer.

And two other considerations…

• We have no reserves.  We have nothing in our figurative savings account.  This is a good article on reserves that we lean on - “The Government Finance Officers Association (GFOA) recommends that local governments maintain reserves equal to two months of operating revenue or, put another way, equal to 16.7 percent of annual revenue.”  The City of Albany should be targeting a goal of $25 million in reserves (minimum) before we can claim that our finances are stabilized.
• We have big debt.  We like Robert Ward’s analysis on the City’s debt.  (Ward is currently a consultant to the Administration).  “$187 million as of December 31, 2025”.  When local governments have general obligation debt that approaches the size of the City’s budget ($230 million-ish) the local government is in big trouble.  We can’t add to our debt and we need a strategy for paying down our debt.

Given all of the above, what were we looking for in the Midyear Report?  We wanted to answer these four questions:

1. Does the Administration have an updated 2026 forecast for revenue and expenditures?  And, if so, how good or bad is it? 
2. Is the Administration making a 2027 forecast?  And, if so, what level of detail will it go into?  The law states “Such update shall include revised estimates of receipts and disbursements for the current fiscal year and the ensuing fiscal year” however we don’t know what level of detail will be presented.
3. Is the Administration announcing or foreshadowing any specific budget cuts between now and the end of the year?
4. Is the Administration bringing in the New York State Comptroller’s Division of Local Government Accountability to provide assistance?

With all of the above in mind we looked at the Midyear Report pdf.  We marked up a copy of the pdf with comments and we have placed a copy of the working document in this Google Drive folder.   If you download and open the report in a web browser (or any other tool that can view pdfs) you will see our comments.

A note about our comments.  The nature of our commenting forces us to be direct.  We have tried to be fair and there is no personal attack behind any of these comments.  We also know that some of our comments will likely be wrong - in full or in part.  We may not have access to some underlying datapoint that would have assisted us in our analysis.

In addition, while we are commenting on the content of the 2026 and 2027 financials and related plans we are also commenting on the history.  The Midyear Report cannot be a narrative that is used to incorrectly revise the historical record.  So if the Report says “Preliminary 2025 results began to emerge in the initial weeks of 2026 following which Mayor Applyrs launched a cross-departmental fiscal review team to work closely with departments” which incorrectly implies that the Administration began working the problem in January and not March when it actually happened… we are going to comment on that.

We then used a lot of our pdf comments and additional analysis to answer our questions.

Does the Administration have an updated 2026 forecast for revenue and expenditures?  And, if so, how good or bad is it? 

Different people will look at the 2026 financials and could come up with different answers.  We were surprised to see 2026 revenues (pdf page 6) come in only $1.1m under budget.  Note that the $10.6 million positive variance in Intergovernmental aid (NYS aid) is supporting this number.  We would suggest that a question that the Common Council should ask is “what is the confidence level in the 2026 revenue estimate?”  What is behind this question is the City has a track record of overestimating revenue. 

What is most concerning is the 2026 expenditures (pdf page 7) with a $21 million miss.  The ownership of this miss is shared by everyone who was in the figurative room during the budget cycle - the former Mayor, the current Mayor as Auditor, the Treasurer, the Budget Director and the Common Council.  

We want to cross-reference the 2026 financials, as presented, with the Treasurer’s Q2/2026 Interim Financial Report (not available as we write this), so that we can drill into numbers such as Overtime costs, PILOTs and more.  In addition, we want to see the Treasurer’s narrative to see if his point of view aligns with the Midyear Report’s narrative.  The Common Council must ask when the Treasuer will be releasing the Q2/2026 interim financial report.

How bad is our 2026 position?  It could always be worse, however we would give the crisis as of midyear 2026 a 9 out of 10.  It's bad.

Is the Administration making a 2027 forecast?  And, if so, what level of detail will it go into?  

As we noted above, the law states “Such update shall include revised estimates of receipts and disbursements for the current fiscal year and the ensuing fiscal year” however we don’t know what level of detail will be presented.

Frankly, we were surprised to see the level of detail and projections for 2027.  Projecting financials a year ahead based on only a half year of prior year financials is challenging.  

Our view of 2027 - as presented in the Midyear Report - is that the crisis becomes a 10 out of 10.  The current 2027 projection shows an 18% growth of expenditures between the 2025 Actual numbers and the 2027 Projected numbers.  Expenditure growth from 2026 to 2027 is 5.9% while 2026 to 2027 revenue growth is 1.6%.  While a non-technical term, we would describe these numbers as bonkers - "bonkers" is bad, btw.

We would encourage the Common Council to request “Please release all data and analysis that supports the 2027 revenue and expenditure projections.”

Which leads us to the next question…

Is the Administration announcing or foreshadowing any specific budget cuts between now and the end of the year?

No.  

The Administration has identified phase 1 and phase 2 cuts - $7.6 million savings.  We reviewed these cuts in this article  and noted that only $5.6 million of those cuts are recurring cuts that will extend into 2027.  These cuts are slightly over 2% of the City’s budget.   If the City of Albany were an average household this would be like cutting the Netflix and Paramount+ streaming plans - it’s a performative start, you have to keep going.

A question that the Common Council should be asking the Administration - why are you not making any more recurring operating expenditure cuts in 2026?

In addition, in the Midyear Report there is no announcement or commentary on capital expenditure cuts.  The City of Albany has $51.4 million of spending in the approved 2026 budget for the Capital Improvement Plan (CIP) (details of the CIP in the budget doc here, pdf page 116).  $33 million of the CIP is financed through debt (see our comments about debt earlier).  We cannot grow our debt.  Cutting Capital Improvement Plan expenses will not save us much in 2026 however we will see the benefits in future years as we don’t accumulate debt.

A question that the Common Council should be asking the Administration - what is going on with the Capital Improvement Plan?  Are you making cuts and if so, what and how much?

Is the Administration bringing in the New York State Comptroller’s Division of Local Government Accountability to provide assistance?

While not a part of the Midyear Report document, we were happy to see reports that the Mayor is requesting Comptroller assistance.  We have been asking for this since May.  The Comptroller’s office has resources and talents that do not exist in the current Administration, specifically expertise in Strategic Crisis Financial Management.

We’re not going to expend any energy here asking “what took so long?”  However we would like to see the plan for bringing the Comptroller in.  Will the Comptroller be asked to create models for debt management?  Strategies for building up reserves?  Merely checking the Administration’s numbers?  Helping with process and best practice?

We recommend that the Common Council asks questions such as What is the scope of the ask of the Comptroller?  Where does the Administration need the most help?  Who will be monitoring the work and collaboration with the Comptroller?

We are releasing this as a first draft response to the Midyear Report and will update our document with any corrections, new findings or thoughts, etc.  We will note when/where we are making these changes.  

If you have any questions, note anything that is questionable, etc - please feel free to comment on social media wherever you saw this posted.  Or drop an email to us at albanydatastories@gmail.com