Tompkins County officials say the county is staring down a potential $11 million budget deficit next year.
County officials say health care, public safety and infrastructure costs have risen. There’s also more demand for social services, housing assistance and mental health support.
At the same time, officials said federal and state funding cuts have had a significant impact on the county.
“Tompkins County has kept its annual property tax levy increase to an average of less than 1.2 percent over the past 4 years,” Tompkins County Legislative Chair Dan Klein said in a statement. “However, the reality of increasingly complex problems, inflation, and the impending federal cutbacks is catching up to us. This is a very difficult budget year.”
Klein also told WHCU Radio that the county’s 2024 expenses exceeded revenue by about $2 million in 2024, impacting finances for 2025 and 2026.
Filling that deficit while maintaining services would require an over 20 percent increase in the tax levy, according to calculations presented at the legislature’s 2026 Budget Retreat.
Tompkins County’s initial budget proposal will be presented in September. The final budget should be passed in November.
WSKG's Aurora Berry spoke with Tompkins County Legislative Chair Dan Klein about the potential deficit.
This interview has been edited for length and clarity.
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Aurora Berry: I'm speaking with the Chair of the Tompkins County Legislature, Dan Klein. Dan, thanks so much for being here today.
Dan Klein: My pleasure, Aurora. Anytime.
AB: How did we get here?
DK: So the projected budget deficit, which we're calculating at the moment, is about $11 million. That means that we have $11 million more of expenses than we currently project for revenue.
How did we get here? It's a combination of things. One is that, as everyone knows, we are living in a world where costs have gone up a lot, and so we're just experiencing that like everybody else.
We, the county, have kept our tax increases very low. If you average the last four years, the annual tax levy increase for the county has been under 1.2 percent. so we have been very frugal in the last few years, but costs have been rising during that time. If you look at the inflation rate during that time, it's in the 15 to 20 percent range cumulative. So we kept our tax increase well below the rate of inflation, and that's sort of catching up to us now. So that's part of the story.
AB: And is it inevitable that we're going to see this really large $11 million deficit, or are there things that can be done to help prevent that?
DK: Yes, so that $11 million is just the very starting point, and we're going to do everything we can to bring that number down. And a number of things are going to happen. We have a new County Administrator, Korsah Akumfi, and he is looking at things in a little bit of a different way than have been looked at in the past, and we welcome that. And so he's going to be looking in every budget line, every corner of the budget, to see if there are expenses that can be brought down and revenues that can be brought up.
Another approach that we have to all this is that we do have a lot of money in our fund balance. This is a very controversial topic among the legislators. We have a real division in how people think about that money. Some people think we don't have enough in there, and some people think we have too much in there. But that's always an option, that we can use some of that money to bring the tax levy down.
And then the last thing I'd mention is that we are in July. The final budget won't be adopted till November. And it's been my experience that most years, something happens in those last few months that changes the whole budget picture.
AB: Outside of inflation, there’s some conversation about cuts at the federal level. How are we seeing that impact this deficit?
DK: Yeah. So there's a lot of unknowns still in what the federal budget is going to bring to us. Our best calculations at the moment are, it's not going to hit us very hard in 2026 but it is going to start hitting us specifically. That's when cost sharing changes.
So in the past, the federal government has paid 75 percent of the SNAP benefits. That's food stamps. They are now lowering that to 50 percent, which means the states and or the counties are going to have to pick up the difference, and that starts in 2026.
And then another factor that we know is starting in 2027 there's going to be increased work eligibility requirements, and we, the county, are the ones that are responsible for verifying those work requirements.
That means, we don't know how many people yet, but we're going to have to hire people simply to carry out that function that the federal government has said we have to do. It starts in 2027 but there's a good chance we're going to have to hire people in 2026, so that on January 1, they are ready to go.
AB: We're starting to see the impacts of the federal budget on county operations in 2026 but the bulk of these changes are being put into place further down the line. How do you see these changes impacting the county's budget-making process going forward?
DK: I do think it's going to get harder, rather than easier. The first federal budget cuts to the county operations will hit us in late 2026 and then much harder in 2027 and 2028. But there's a whole other way to think about all this.
Those are the direct costs to the county budget. It's the indirect costs that are much harder for us to understand and to measure what the impact might be on county services and the county budget. But it's almost indisputable that starting soon and continuing and accelerating, there are going to be a bunch of people who are going to lose their food stamps, their SNAP benefits. They're going to lose their housing benefits, they're going to lose their health insurance benefits. And there's a disaster scenario in there that is very plausible.
There could be large numbers of people that are in desperate need here and everywhere else, and that is the job of the county government, to address those needs. So those kinds of indirect costs, those kinds of future costs, at the moment are at least impossible to calculate, but in my mind, they're very plausible.
I'll also say this: we know that people have lost their jobs already at Cornell. I don't really have a number for how many that is. And then also all those people that are going to be losing housing and SNAP benefits and health insurance, if that plunges them into homelessness, if that causes them to lose their jobs, then that's less sales tax that we have, which is our other source of revenue. That's another potential and very plausible indirect cost that we face in out years in 2027 and beyond.
AB: That's Tompkins County Legislative Chair Dan Klein. Once again Dan, thanks for being here today.
DK: My pleasure, anytime.