ALB ANY - The state-funded report on Albany -- projecting a future deficit could be as high as $23.5 million without corrective action --- shows the city is in a dismal state, Common Councilman Frank Commisso Jr. said Tuesday.

Elected leaders and mayoral hopefuls in Albany sounded off Tuesday on the recently released report completed by The PFM Group.

“It is a demonstration of significant growth in the city’s projected deficit,” said Commisso, a Democratic mayoral candidate. “Clearly, Albany is headed in the wrong direction. This is only confirming what we knew was a very deteriorating situation in the city of Albany.”

For the 2011 budget, former mayor Jerry Jennings’ administration sought a $7.8 million a spin-up on the payments the state provides to the city for Empire State Plaza being off the tax rolls. Jennings also budgeted an estimated $5.6 million in reserves to close the 2011 budget gap. The city seeking $12.5 million in state aid suggests the deficit has increased, Commisso said.

The deficit figures in the PFM report don’t include additional state aid since the report’s goals were to ease the city’s fiscal strains and wean it off of state aid.

Although Albany’s deficits have been publicly reported to be anywhere between $18 million and $23 million in prior year budgets, Commisso said “that’s political spin” and pointed to the PFM figures as “the standardized number.”

The report offers options to the city, such as cutting police and fire staff, raising property taxes and expanding the trash fee. The $180-per-unit fee currently is imposed on small apartment buildings only, allowing for the first unit to be free.

“The trash fee, I understand it’s not popular, and there are many who say we should eliminate it, but again it’s a balancing act,” said Mayor Kathy Sheehan, who is seeking reelection.

As for property tax increases?

“That’s a recommendation,” Sheehan said, noting there are other suggestions city officials may not agree with. “I think that it’s a challenge in a city that already has significantly higher tax rates than our surrounding suburb communities, and so we would be looking at alternatives to raising property taxes.”

Commisso said expanding the trash fee or raising taxes are unacceptable recommendations.

“I couldn’t find anybody in this city, a homeowner or a business owner, that would think that that is an acceptable solution,” he said. “We have a plan to audit tax exempt entities, have an attrition plan to go forward to reduce costs by millions of dollars, and share services with municipalities here, including recreation programming with Albany County.

Commissioner of Assessment Keith McDonald said the city already investigates nonprofits for appropriate exemption status.

“There’s not this large hole that’s going to be filled by finding some not-for-profit that’s not paying,” McDonald said, noting the state needs to review Real Property Tax Law and New York state has its own tax exempt status.

Sheehan said the city is already pursuing several recommendations, like updating and centralizing payroll and purchasing departments, exploring the option of purchasing its streetlights and consolidating 911 dispatch with Albany County.

"It validates the work we're doing and the fact that we have placed the city on a sound fiscal path,” she said. “There is still much work to do, but the report certainly acknowledges that much long-awaited changes have been made and will continue to be made.”

Council President Carolyn McLaughlin said some of the recommendations are good ideas, but they aren't the blueprint for the city's financial future.

"I'm not saying they're all great ideas," she said. "There are things that should be explored. We need to look at how we staff the police and fire. That might have some merit. People have to be prepared for what a change would like for the city of Albany.”

Local activist Marlon Anderson, who seeks to run for mayor, said the report is an example of the continued lack of leadership in Albany.

“The fact that all three of my opponents for the Democratic nod have been in power during this time should be something every voter in the city of Albany considers as they plan to place their support in this election cycle,” he said.

Daniel Plaat also is running for mayor as a Green Party candidate.