The city of Elmira proposed a 12 percent property tax increase in its $46.7 million 2026 budget.
Next year’s budget proposal is $5.3 million more than the city’s 2025 budget of $41.4 million.
Tax rates for 2026 would increase by $179.90 for a property assessed at $50,000, $359.80 for properties assessed at $100,000 and $539.70 on properties assessed at $150,000.
“While a tax increase is never our preferred option, it is a necessary step to ensure the continued delivery of essential city services and to safeguard the city’s long-term financial health,” said City Manager Michael Collins in his budget letter to the Elmira City Council.
During the city manager’s budget presentation on Dec. 12, he outlined several factors for the increases to the 2026 budget. These factors include a rise in health insurance, personnel wages, retirement contributions and changes to shared services agreements.
Collins said a $912,000 appropriation from the general fund balance is necessary to bridge the budget deficit.
“Each of these factors has placed added strain on our financial position and contributes to the ongoing challenges in maintaining a stable fund balance,” said Collins.
The city’s fund balance has declined “significantly” year-over-year. In 2023, there was $7.46 million. In 2024, the fund balance dropped to $2.42 million.
The city faces terminated shared services with the county and expiring union contracts as well.
In 2018, Chemung County began terminating shared services agreements with the city. The agreements were set in 2015 during the previous county administration under former County Executive Tom Santulli.
Under the shared service agreements, city personnel could join Chemung County’s health insurance plan and both Elmira’s buildings and grounds and the department of public works were moved to county employment.
Part of the agreement was that the county’s sales tax would be set from a 50-50 percent split to a 66-34 percent split. The city of Elmira’s share went from 12.33 percent under the initial terms to 9.03 percent under the new terms.
The county required the city to become self-insured for its health insurance in 2018. The city paid a total of $2.7 million in unbudgeted plan overages in 2023 and 2024 due to this change.
The buildings and grounds agreement was terminated in 2021, and in 2024 the county dropped the health insurance agreement.
The sales tax distribution was not restored to the city’s original portion of 12.33 percent.
Elmira Mayor Dan Mandell said since current County Executive Christopher Moss began terminating shared services agreements between the county and the city, the sales tax split has remained 66-34 percent.
“Starting in 2021, we [had] absorbed those costs. With that being said, he never increased the sales tax share,” said Mandell. “He kept the sales tax share the same.”
According to the proposed 2026 budget presentation, the city estimates that due to the sales tax distribution not being restored, along with the city absorbing shared services and health insurance back from the county, Elmira has lost $23.4 million over the last decade since entering into the agreements in 2015.
“We are basically taking it on the chin when it comes to sales tax revenue,” said Mandell. “Where we're making only about $6 million a year in sales tax, where it goes back to the original formula, we'd be making over $9 million.”
Mandell said the city’s relationship with the county executive has recently become strained.
“We started off with a real good relationship, but it's starting to deteriorate a little bit because of this, these moves that he's done, but we've told him, we just can't afford this.”
The New York state comptroller’s office released its municipal fiscal stress scores in September for fiscal year 2024. The city of Elmira was designated as “susceptible” to fiscal stress with a fiscal score of 47.1 and environmental rating of moderate.
Scoring takes into account a municipality’s year-end fund balance, operating deficits, cash flow, short-term borrowing history and fixed costs as well as population, income and reliance on state and federal funding.
Elmira made the list in 2018 when it showed “significant stress” with a score of 68.3.
Adding to a loss of tax revenue for the city of Elmira is Chemung County’s recent purchase of an office building located in the city for $1 million. The purchase removed it from property tax collection in the city at a loss of $24,000 per year, according to Mandell.
WSKG reached out to the county executive and did not hear back in time for publication.
Thirty-nine percent of property in the city is tax exempt. Properties with this exemption include Arnot Ogden Medical Center, Elmira College, Lake Erie College of Osteopathic Medicine (LECOM), Elmira City School District (ECSD) and properties owned by the state and county.
Sixty-one percent of taxable properties are responsible for 100% of the property tax levy in the city.
Elmira’s Professional Firefighters Association contract expires at the end of the year.
Mandell said there is a contingency in the proposed budget but he expects the city manager to continue negotiations into 2026.
Budget documents can be found on the city chamberlain’s office page on the city’s website.
The budget is set for a vote on adoption in January but the public hearing has not been scheduled. Mandell said it is likely the public hearing will take place during the first city council meeting in the new year, which is not scheduled as of this report.