With Mandated Cost Increases Exceeding the Cap, Village Trustees Examine Four Proposed Budget Scenarios

School districts and municipalities across New York State are struggling to bring their budgets in below the state tax cap, though contractual increases in salary and mandated increases in benefits outpace the allowable cap.

At Scarsdale Village Hall, trustees reviewed the proposed 2026-27 Village Budget and sought to close a $2.771mm gap in expenses over revenues –using option such as a tax levy increase, the use of fund balance or borrowing.

With personnel costs going up 3.5%, projected expenses exceed revenues by $2.771mm. Unlike the School Board, the Village Board votes on the budget without a public referendum. So the Board can authorize an increase above the cap. But it appeared that this year they are trying to keep the budget increase as close as possible to the allowable limit.

As the Village has not had a treasurer since last summer, they retained consultants to work with staff on formulating this year’s budget. At the meeting on Tuesday March 10, Tom Vouzakis of Capital Market Advisors presented four scenarios to close the gap between revenues and expenses.

As an exercise, Village Manager Alex Marshall asked department heads to propose 4% and 8% cuts to their budgets and some of these suggested reductions were included in the four scenarios.

The scenarios examined a range of choices to increase projected revenues and reduce projected expenses. The gap could be entirely filled by increasing taxes, and that was considered in Scenario One.

In Scenario 2, the budget gap would be addressed with a smaller increase to the tax levy and and a $1.385mm increase in appropriated fund balance.

In Scenarios 3 and 4, the board discussed increasing projected revenues for sales tax, interest earnings, a transfer from the Water Fund and charging credit card fees to recreation department users.

On the expense side, the board discussed deferring some expenses, funding others with fund balance and even borrowing to pay for a $980,000 replacement of the roof of Village Hall.

For instance, there was $150,000 in the budget for renovations to the former A-School building on Wayside Lane. However, since the Village is unsure about the future use of the building and is conducting a needs assessment, Trustees discussed deferring those renovations until it’s clear how the space will be utilized. Other recommendations included reducing the budget for the fireworks, decreasing vehicle purchases, spending less on sidewalk improvements and funding a playground renovation by using funds from the recreational trust.

You can see the scenarios and the entire list of proposed adjustments here: 

At the conclusion of the work session Trustees indicated a preference for adopting a mixture of the adjustments listed in scenario 3 and 4.