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Cayuga County Legislature Chairman Jonathan Anna, I-Sterling, detailed the budget crisis legislators must confront this year. After using $5.6 million to close the 2025 budget deficit, there is nearly $14.3 million remaining in the fund balance — an amount that is below the county's fund balance policy.

"We can no longer rely on fund balance to fill the deficit of our operating budget," said Anna, who acknowledged that not relying on the fund balance "will be no easy task."

That's because legislators will be forced to make unpopular decisions. They can cut spending — the current budget slashed 23 positions — or raise taxes.

Anna explained that the stresses on the county's budget remain the same. Those stressors include increasing health insurance premiums and retirement contributions, the rising cost of services, inflation and expenses related to the closure of the Cayuga County Office Building.

The county has taken action to address its budget challenges, according to Anna. When the Legislature adopted its rules earlier this year, a personnel committee was established to review positions and approve all county hires. The committee has decided not to fill several positions, he said. The Legislature implemented a temporary hiring freeze that runs through August.

Other reforms include evaluating the county's non-emergency vehicle fleet and not buying new vehicles. The goal is to use vehicles more efficiently, while also downsizing the fleet.

The county is also exploring ways to reduce energy costs. Shutting off most lights at the county office building is part of that process. They also renegotiated cleaning contract to allow for the purchase of their own supplies, which should save money.

Anna said he advised the purchasing department to issue requests for proposals for long-term contracts instead of automatically renewing them.

The Legislature approved an amendment to the county's spending policy that requires legislative approval for expenditures that cost $7,500 or more. It is also exploring new revenue streams, including a change to the occupancy tax to apply it to short-term rentals.

Ahead of the formal budget process, a proposed local law was introduced to override the property tax cap. The cap, which limits property tax levy growth, was 4.25% for the 2025 budget. The county won't know the cap for 2026 until this fall, but it's expected to be under 3%.

Anna told the Legislature that the budget proposal, which will be released in October, will not exceed the tax cap. But overriding the cap would give the county more flexibility to address its budget challenges, especially if it wants to avoid using the dwindling fund balance.

A public hearing was held during Tuesday's meeting, but no residents commented on the proposal to override the tax cap. When the Legislature began consideration of the resolution, Anna motioned to table it until later this year.

Legislator Ben Vitale, I-Montezuma, opposed the motion to table the resolution. He noted that while the local law would give them the ability to exceed the tax cap, it "doesn't mean we have to do it."

"It might, just might, force us to have some discussions about the budget," he said. "It might force people to explain what their appetite is for tax increases."

Although the proposed spending plan won't exceed the tax cap, Anna told legislators that the projected limit "is not going to be sufficient for our budget next year." But he also acknowledged that the local law to override the tax cap may not have the votes for passage.

By tabling the resolution, the Legislature could revisit the proposal at a later date. If they rejected the measure, lawmakers would need to restart the process to override the cap if it's needed for the 2026 budget.

Legislator Aileen McNabb-Coleman agreed with Vitale about the budget situation and the need to discuss possible scenarios, whether that's exceeding the tax cap, raising taxes or cutting services.

"It seems as though we are about to step off the curb to be making some really concerning changes in county government in order to fill this hole," she said.

Anna has been meeting with the county's bond council and examining financing. A takeaway from those discussions is the county has "a finite amount of time to fix our budget," he said. 

If the county can't cut enough to close its deficit, more revenue will be needed. Anna does not want to raise taxes, but described it as "a necessary evil of government because, at the end of the day, we have to administer government programs."

"If we are not going to override the tax cap... and we still want to meet fiscal goals, we will have to cut deeper than anyone on this board wants to cut," he added.