Albany to Borrow $10 Million to Cover Salaries and Expenses

Albany is preparing to borrow $10 million on Wall Street to cover employee salaries and basic operating expenses during the final months of the year, according to a report by the Times Union.

The city plans to issue revenue anticipation notes on Nov. 24 and repay them by Feb. 24. This short-term debt is intended to bridge a gap in cash flow as the municipality manages a tightening fiscal environment.

The move comes as city officials negotiate a $258 million budget for next year while grappling with a spending plan that is expected to fall millions of dollars short of projected revenue. The financial strain is visible in the city’s recent credit standing; S&P Global Ratings downgraded Albany’s bond rating from “A+” to “A” in July, a shift that increases the cost of borrowing.

A widening budget gap

The scale of the deficit is growing. While the city faces a $22.18 million deficit this year, current data suggests the shortfall could reach $33.3 million in 2027 and potentially climb higher.

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To mitigate these pressures, the state provided an additional $20 million in the state budget this year. This allocation followed a handshake agreement that the funds would be included in the next two budget cycles to help address the city’s fiscal struggles. However, the immediate need for liquidity remains acute.

The debt-security documents for the upcoming notes sale include a specific warning regarding the city’s stability, noting that “the city has experienced severe financial difficulties in recent months which could affect the marketability and the market value of the notes.”

Albany has not relied on these types of revenue anticipation notes since 2016. Some observers, including the city’s budget adviser Bob Ward, have questioned the necessity of the move. In a May column on Substack, Ward noted that such notes are typically reserved for cases of “abnormally severe cash-flow problems.”

Political friction over spending

The decision to borrow has ignited a sharp debate within the Common Council. Common Council member Deirdre Brodie, who serves on the Finance Committee, criticized the administration’s recent travel following the news of the borrowing plan.

“Why are we partying in Puerto Rico when we need to take out a payday loan to pay 1,400 city employees right before Christmas?” Deirdre Brodie

Brodie, who shared her concerns in an Instagram video, suggested she was blindsided by the plan to issue the notes. The video noted that Mayor Dorcey Applyrs, Chief City Auditor Sam Fein, and Council members Owusu Anane and Alfredo Balarin attended the Somos conference in San Juan, a political and cultural event held at the Caribe Hilton.

Mayor Applyrs’ office responded to the criticism with a statement explaining that the mayor was working to strengthen ties with state officials while managing “one of the largest fiscal challenges facing any municipality in New York.” Her staff stated that the trip to Puerto Rico was funded through a combination of personal and campaign funds, though the official statement did not directly address Brodie’s specific remarks.

City Treasurer Darius Shahinfar pushed back against the characterization of the city’s finances, calling Brodie’s comments disingenuous. He noted that the city’s financial situation has been known to lawmakers for months.

“Everyone knows our financial situation; everybody knows this,” Shahinfar said. He added that while the city previously used reserve funds to manage cash-flow issues, those reserves have been exhausted. He cautioned, however, that “to say the city is broke and is not going to meet its payroll is a disservice to the people who work here.”

The human and cultural cost of cuts

As the Nov. As the 30-day deadline for passing the 2027 budget approaches, the administration is weighing budget cuts to maintain solvency. The mayor’s budget proposal includes dozens of layoffs and job cuts.

The Finance Committee is currently discussing several specific areas for potential savings, including:

Scaling back the Summer Youth Employment Program.
Implementing additional staff layoffs.
Canceling the annual Tulip Festival.

The Tulip Festival has been a staple of Albany life since 1949. The city has only canceled the celebration twice before, both instances occurring during the 2020 and 2021 pandemic years.

The tension between immediate debt obligations and long-term structural deficits remains the central conflict for Albany’s leadership. While the $10 million in borrowed notes may ensure that 1,400 employees receive their checks before the holidays, the underlying math of the 2027 budget suggests that the era of using reserves to smooth over shortfalls has ended.

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