Troy

City property taxpayers will absorb a 28.2 percent tax hike if the City Council passes the 2017 budget Mayor Patrick Madden unveiled Friday as the best solution to the city's growing financial problems.

Madden wants to spend $4 million more — a total of $72.3 million — in 2017 than the 2016 budget amount. There are few service cuts, though one proposal — closing two city pools — may prompt a strong reaction.

Madden said this marks the end of "hopeful budgeting and one-shot revenues" that hid the truth of the city's fiscal situation.

"The budget plan I have presented to the council today corrects the over estimated revenues and the understated expenses of the past. It removes speculative one-shots and realistically accounts for sizeable contractually and legally mandated increases in 2017," he said.

The proposed tax rate will climb from $12.07 per $1,000 of assessed valuation from to $15.48 per $1,000. Owners of a home assessed at $100,000 would pay an added $341 under the plan. The total tax levy would jump $6 million to $27.2 million.

Madden's proposal tops the city's last major tax hike. In 1996, newly inaugurated Mayor Mark Pattison convinced the council to back a 21 percent mid-year tax hike to reverse red ink. Like Pattison at the time, Madden is in his first year as mayor and says he inherited a government with deep financial problems.

The magnitude of the tax increase knocked the leaders of the Republican-majority City Council back on their heels.

"I call upon all members of the Troy City Council to reject this outrageous tax hike of 28% proposed by Mayor Madden," City Council President Carmella Mantello said. "This tax hike is the extraordinary result of political budgeting by the former City Council and administration, and the failure of the current mayor to address the city's financial problems throughout 2016."

"It's foreclosure city," Councilman Mark McGrath said about the impact on city taxpayers.

For most of the past two decades, City Hall has avoided steep property tax increases.

During the final year of Mayor Harry Tutunjian's administration and the four-year tenure of Mayor Lou Rosamilia, the city overestimated revenues, drew down $7 million in reserves; siphoned money from the water fund, delayed pension payments, and relied on one-time sales of city property to avoid raising taxes.

The result created a structural shortfall where revenues can't cover the costs of city services.

An audit by the state Comptroller's Office criticized the city for overestimating revenues for the sale of property, franchise and ambulance fees and sales tax. It notes the city's retirement appropriations were inadequate.

A state control board oversaw city finances in the 1990s. If the city closes out its fiscal year with its combined general, water and sewer funds in the red, the Troy Municipal Assistance Corp. would resume direct oversight of the city's daily operations.

The city's healthy water fund, which derives income from selling water to surrounding towns, villages and cities, has provided the fiscal cushion to keep the city out of state control.

The city continues to pay off its Municipal Assistance Corp. debt, which now stands at $28.18 million. The city's debt payment for the MAC bonds is $6.2 million in 2017.

Madden says the financial trouble forced him to propose the record-high rate hike, saying reliance on hopeful thinking when it came to overestimating revenue and underestimating expenses caught up with the city.

More Information What's next Thursday: 6 p.m. Council meets to consider mayor's budget Oct. 18: 6 p.m. Law committee, 7 p.m. Science and technology Oct. 20: 6 p.m. Planning & economic development Oct. 24: 6 p.m. General services Oct. 25: 6 p.m. Public safety Oct. 27: 6 p.m. Public utilities, 7 p.m. Finance Nov. 16: 6 p.m. City Council, mayor public budget meeting Nov 17: 6 p.m. Final public hearing Nov. 29: 7 p.m. Budget adoption vote All standing committees have a preliminary hearing where residents may ask budget questions pertaining to that committee. Meetings are at City Hall. See More Collapse

"This is going to be a really difficult budget," Madden said earlier this week. "It's going to be a difficult budget to hand off to the City Council."

"In 2017, this plan will correct the historical imbalance between expenditures and revenues, which over the past 10 years has depleted our General Fund reserves. This plan is based on actual revenues, operational requirements and actual spending," Madden wrote in his budget message.

The proposed budget eliminates one-shot revenues, such as the sale of city real estate, and makes it clear how much it will cost to provide city services.

Madden said the only major cut is the closing of the city swimming pools in Lansingburgh and South Troy, which have provided a means for the city's underprivileged children to escape the summer heat.

Police, fire and public works services remain the same, Madden said.

Starting his ninth month in office, the first-term mayor confronts city finances so out of balance that the state Comptroller has repeatedly told city officials it cannot continue to ignore its fiscal plight.

The City Council must review and discern whether to accept Madden's budget proposal or modify it. Six members of the nine-member City Council, a two-thirds super majority, must vote to override the state-mandated tax cap for the tax increase to occur.

kcrowe@timesunion.com • 454-5084 • @KennethCrowe