Saratoga Springs faces $5 million gap as 2027 budget nears

Saratoga Springs heads into its 2027 budget season facing a structural deficit that city finance officials have put at about $5 million for 2026, with a larger gap possible next year if nothing changes. Finance Commissioner JoAnne Kiernan has warned the City Council since spring that expenses are growing much faster than revenue, and the council approved a hiring freeze in June to slow the bleeding, according to The Daily Gazette.

The city charter requires the council to adopt a budget by November 30, so the next two months will decide how Saratoga Springs closes the gap. The options on the table include spending cuts, restructuring and a property tax increase.

How big the gap is

The numbers have moved as the year has gone on. Here is how the projections have been reported.

• The adopted 2026 budget, approved in November 2025, totaled $63.5 million and included a 4.53% property tax increase, the maximum allowed under the state tax cap, NEWS10 reported.
• In early June 2026, Kiernan told the council the city faced a potential $5 million deficit for 2026, which she called a worst-case estimate, according to The Daily Gazette.
• In August, Kiernan told CBS6 the city was projecting about a $5 million deficit heading into next year, even with revenue from the Belmont Stakes festival.
• In a second-quarter update to the council in August, she described a worst-case scenario of an $8 million loss in 2027 if the city did not take corrective action, according to a summary of the meeting posted by Citizen Portal.

Why expenses are outrunning revenue

Kiernan’s explanation has been consistent. Revenue is not falling, she told CBS6, but expenses are rising much faster. She said revenue has grown about 3% to 4% a year in recent years, while expenses have risen roughly 19%.

The biggest drivers are employee costs. “Our employees and their benefits are 83% of our budget,” Kiernan told CBS6 in June, adding that overtime, health insurance, retirement and liability insurance have all climbed. She has also pointed to higher utility and material costs.

Her predecessor, Minita Sanghvi, raised many of the same cost pressures when presenting the 2026 budget in 2025. “In the last five years we are seeing a tremendous increase in expenses, primarily in the areas of health insurance, retirement and liability insurance,” Sanghvi said at the time, according to NEWS10. Sanghvi now represents the city on the county Board of Supervisors.

The fund balance problem

The city has covered recent gaps by drawing down its fund balance, its reserve cushion. Kiernan has said that approach cannot continue. “We need to make a plan that we can rely less on fund balance,” she said at a June pre-agenda meeting, according to The Daily Gazette.

At the June meeting, a presentation showed the city’s unassigned fund balance, projected at about $11 million at the end of 2025, falling to roughly $8 million by the end of 2026. The city is required to keep a minimum reserve, so continued deficit spending would push it toward that floor.

Choices already made in the 2026 budget

The current budget already leaned on revenue. Along with the 4.53% tax increase, the council voted last November to end the 2.25% discount for paying property taxes early, citing the need for more revenue, NEWS10 reported. It also approved a $2.25 million capital budget, about $347,000 less than first planned.

What the city has done so far

The council has taken a few steps this year while the full budget is prepared.

1. In June, the council approved a hiring freeze through the end of 2026 for open positions where no offer had been made, The Daily Gazette reported. Kiernan called it an interim solution.
2. Commissioner of Public Safety Tim Coll said his department would feel the freeze most, since it has more full-time employees than the rest of City Hall’s departments combined, according to The Daily Gazette.
3. Kiernan has urged a multiyear approach to budgeting rather than year-by-year patches.

What is on the table for 2027

No proposed 2027 budget had been released when we checked. Based on what officials have said publicly this year, residents should expect debate over these options:

• Spending cuts and operational restructuring across departments.
• A property tax increase, which would come on top of the 4.53% increase in 2026.
• New or higher revenue, such as changes to the seasonal paid-parking program. When the 2026 budget was proposed in 2025, the city discussed extending paid parking from Memorial Day through Labor Day to an April-through-October season, according to The Daily Gazette.
• Delays to capital projects. The council has been working toward a new police station and a new public works garage, which together would add about $1.5 million a year in debt service, Sanghvi said in 2025.

How the city’s form of government shapes the fight

Saratoga Springs uses a commission form of government. The finance commissioner prepares the budget, and each commissioner runs a department. That structure means cuts land department by department, and commissioners often defend their own budgets. Commissioner of Public Safety Tim Coll and the public works commissioner oversee the city’s largest workforces, where most of the overtime and benefit costs sit.

What it means for residents and businesses

For homeowners, the likeliest direct effect is another property tax increase. For businesses downtown, parking policy is the item to watch, since paid parking in city garages already runs from Memorial Day weekend through Labor Day at $2 an hour. City services could also change if departments cannot fill vacancies under the hiring freeze.

Timeline

The key dates ahead:

• The finance commissioner is expected to present a proposed 2027 budget this fall.
• Public workshops and hearings typically follow over several weeks.
• The council must adopt a budget by November 30.

We will report on the proposed budget when it is released. Know something about the city budget we should look into? Send us a tip.