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The 2025-26 state budget includes legislation sponsored by state Sen. Rachel May on behalf of the city. It will allow the city to institute a hotel tax of up to 5%.

Localities must receive state authorization before establishing occupancy taxes.

Auburn Mayor Jimmy Giannettino told Ë®¹ûÅÉAV that the inclusion of the hotel tax legislation in the state budget is "welcome news" to the city.

"As costs for everything continue to rise, it becomes more and more difficult for us to provide the services that everybody relies on," Giannettino said. "A bed tax is something that municipalities across the state are using to try to take the burden of providing these services off the property taxpayers."

The city of Auburn's interest in a hotel tax began in 2023, shortly after Gov. Kathy Hochul signed legislation allowing the village of Weedsport in Cayuga County and the town and village of Skaneateles in Onondaga County to implement occupancy taxes.

The Auburn City Council decided to initiate the home rule process, which allows local governments to seek authorization from the state government. Letters were sent to Assemblyman John Lemondes and May requesting they sponsor legislation that would allow the city to institute a hotel tax.

May introduced the bill in early 2024, but Lemondes wanted to hold a public meeting on the proposal before making his decision. The meeting was held in March 2024. Two months later, near the end of the legislative session, he announced his opposition to the hotel tax bill.

The City Council renewed its push for a hotel tax this year, and May reintroduced the bill. But it was unlikely to pass as a standalone measure without an Assembly sponsor.

Several New York counties, including Cayuga, have hotel taxes. Cities, towns and villages have also implemented hotel taxes. In central New York, Ithaca and Syracuse instituted occupancy taxes.

For hotels in Auburn, the city's tax would be in addition to the county's tax, which supports the local tourism office. City officials estimate the new tax would generate $500,000 in annual revenue.

The approval of the hotel tax is timely for the city as it addresses a nearly $3 million budget shortfall. The City Council, which is in the midst of its 2025-26 budget process, is considering whether to override the property tax cap to erase the deficit.

"We have to do everything we can to minimize the impact on local taxpayers but still provide those services," Giannettino said.

The state Legislature is expected to vote on the budget bills this week. It is the latest state budget since 2010.