City officials in Auburn say the community’s growing budget crisis is no longer theoretical — and even aggressive spending cuts and tax increases this year may not solve the city’s long-term financial problems.
During a public budget update this week, City Manager Jennifer Haines and Comptroller Mary Beth Leeson outlined the difficult choices facing city leaders as they work to close an estimated $5 million shortfall for the 2026-27 fiscal year. Officials said Auburn is now weighing combinations of service reductions, personnel cuts and a tax levy increase that could exceed the state tax cap.
Haines said department heads have now submitted multiple budget scenarios, including one that fully funds departmental requests and would require roughly a 28% tax increase, as well as versions involving 8% and 11% departmental reductions.
Officials said the city’s problems stem partly from years of using temporary federal pandemic aid to maintain staffing and operations. Auburn used its final $1 million in American Rescue Plan Act funding to help balance the current budget, but Haines said another $2 million in fund balance will also be needed to get through the remainder of the current fiscal year.
Leeson said the city expects to have roughly $800,000 remaining in fund balance by July 1 — well below the city’s policy minimum of approximately $3 million, or 6% of the operating budget.
Officials pointed to several major cost drivers, including health insurance, utilities and labor contracts. Auburn currently spends about $10 million annually on employee health insurance and is projecting another 10% increase next year alone. Leeson said that increase would add roughly $1 million in costs, while a 2% tax levy increase only generates about $500,000 in new revenue.
City leaders are now in negotiations with multiple unions over health insurance contributions and other contract provisions. Haines said employees currently contribute between 15% and 25% toward health insurance costs, depending on the bargaining unit.
The city is also pursuing an early retirement incentive program. Officials said six employees have already committed to retirement, with several more potentially participating before the May 15 deadline. Some positions may remain unfilled permanently as part of the city’s cost-cutting efforts.
While officials stressed they are still refining exact staffing impacts, they acknowledged personnel reductions remain likely even under a proposed 8% tax levy increase scenario.
Much of the public focus has centered on the city’s police and fire departments.
The fire department’s staffing levels are complicated by contractual minimum staffing requirements that require at least 14 firefighters on duty at all times. Haines confirmed the city is discussing all contract provisions during ongoing negotiations with the firefighters union, including minimum staffing language.
At the police department, officials said existing vacancies, retirements and transfers may reduce the need for layoffs, though exact staffing plans are still under review. Haines also pushed back on fears that Auburn could eliminate overnight patrols, saying she hopes improving financial projections and staffing adjustments will keep that discussion off the table.
City Council is expected to discuss overriding the state tax cap later this month. Auburn’s allowable tax cap increase is currently 4.72%, and officials said an override would require approval by a supermajority of the council.
The city is also waiting to see whether additional state aid materializes in Albany. Officials said Auburn has approximately $1.7 million in temporary AIM-related funding included in its projections but acknowledged uncertainty remains until the state budget is finalized.
Even if Auburn successfully closes the immediate budget gap this year, officials warned the structural problems facing the city are likely to continue.
“This $5 million would not specifically add to our fund balance for next year,” Haines said during the discussion, adding that city officials will continue working on long-term financial stability after the current budget is adopted.
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