Albany homeowners could see their property tax bills jump by hundreds of dollars next year under a new budget proposal from Mayor Dorcey Applyrs that pairs a 15% tax levy increase with millions in spending cuts and a slate of new fees. The $355.2 million spending plan for 2027 is Applyrs' answer to a fiscal crisis she says has been building for years, one that a recent state audit blamed on budgets built on numbers that never added up.
The property tax levy increase is expected to generate $9.646 million for the city, according to wnyt.com. For the owner of a typical $250,000 home, that works out to an extra $280 a year, or about $23 a month, starting in 2027. The proposal also calls for a new 0.5% city-only sales tax projected to bring in $5.25 million, which would tack on an extra 50 cents to every $100 purchase, per the same report.
Applyrs has framed the budget as the product of months of work with city departments, saying it reflects a soundly balanced approach meant to put Albany on what she described as a multi-year path to fiscal sustainability. The mayor said her first spending plan centers on public safety, preserving essential services and economic recovery, even as she acknowledged the city faces what she called a serious fiscal crisis and extremely tough budget decisions ahead.
Cuts, Fees and a New Charge for Tax-Exempt Properties
To help close the gap, the city has already trimmed personnel and operating costs by more than $9 million, a reduction the mayor's office says came out of spending-reduction plans submitted by every city department, as CBS6 Albany reported. The budget also leans on new revenue sources beyond taxes: a new embellishment fee for tax-exempt properties, projected to raise $500,000, is designed to offset costs tied to street cleaning, snow plowing and sidewalk rebuilding.
Beyond that fee, the city is counting on $350,000 from stronger event-fee collections and another $2.5 million from increases to recreation and departmental fees. A $1.5 million contingency fund has also been built in to cover unanticipated costs or revenue shortfalls in 2027, according to the wnyt.com report. The proposed general fund rises to $257 million, up from $228 million in 2026, while the mayor's plan also includes a $49.6 million water fund, a $45.7 million capital projects budget and a $2.9 million youth and workforce fund.
Debt and Deficits Driving the Squeeze
Part of what's pushing costs higher is debt service, which is projected to climb by $9.3 million to a total of $28.5 million in 2027. City officials have pointed to a mix of pressures behind the budget gap, including higher employee wages, rising health care costs, debt-service increases and higher fuel, construction and utility operating costs. Albany is facing a $35 million deficit for 2027, on top of the $26 million operating deficit state auditors projected for the end of 2026.
That $26 million figure comes from a state comptroller's report examining how Albany got here in the first place. New York State Comptroller Thomas DiNapoli's office found that the city's 2025 and 2026 budgets included significant revenue and expenditure estimates that were not reasonable, according to WAMC. Albany, the audit found, had been using temporary federal pandemic aid and fund balance to pay recurring expenditures, including staff salaries, even after that money ran out.
A Pattern of Overestimating Revenue
The city used the last of its $80.7 million in pandemic-era American Rescue Plan Act funding in December 2024, but the Times Union reports that Albany still budgeted $2 million in nonexistent ARPA funds for 2025 and another $1 million for 2026. The comptroller's office said Albany's budgets overestimated income from various civic revenue streams and, in one case, allocated $3 million in pandemic funds that simply did not exist. Auditors also found the city spent $3.6 million more than expected on police overtime and $2.5 million more than expected on retiree health insurance in its 2025 budget alone.
DiNapoli's office said Albany did not prepare its budgets using realistic estimates based on historical trends, actual results or the most current information available, and the report identified Albany as the second-most fiscally stressed municipality in the state. Officials were advised to rely on reliable, representative comparative data going forward, including actual revenue trends, rather than optimistic projections. Even with an additional $20 million in state aid this year, city officials told the Common Council's Finance Committee that Albany still faces an eight-figure budget gap.
Where the Revenue Has Fallen Short
The gap between projection and reality shows up across multiple revenue streams. In 2025, Albany collected $17.4 million in PILOT payments against an estimated $19.4 million, the Times Union reported, while sales tax revenue came in $2.7 million below its forecasted $50 million, with a projected $2.2 million shortfall expected this year. Those shortfalls are compounded by a structural challenge that predates any single budget cycle: Assemblymember Gabriella Romero has noted that almost two-thirds of the property in the City of Albany is non-taxable, limiting how much the city can lean on property taxes alone.
The proposed 2027 budget now heads to the Albany Common Council for review. Whether lawmakers accept the 15% levy increase, the new sales tax and the added fees as written remains to be seen, but Applyrs has cast the plan as a necessary reset after years of budgets that, according to state auditors, were never built on solid ground.
