Follows loss of $35 million in the prior year
Buffalo’s structurally imbalanced budget led to an operating loss of $23 million, a gap which it plugged by tapping its dwindling reserves, according to the city’s year-end financial statements for the fiscal year that ended on June 30. $35 million in reserves was used to fill the budget hole in the prior year.
“The city has squandered more than $107 million of its reserves in the past eight years,” said Buffalo Comptroller Mark Schroeder, who issued the city’s Comprehensive Annual Financial Report. “The reserves at a such a low level right now, there won’t be enough to fill budget deficits moving forward.”
Buffalo’s total fund balance is currently $92 million, down from $166 million in 2013. Most of those reserves are set aside for specific purposes and can’t be used to fill budget gaps. The category of fund balance that can be used for that purpose is “unassigned,” which currently has a zero balance, down from $64 million five years ago.
“The city will need some outside help if it can’t meet its budget projections in the current fiscal year, because it can’t rely on reserves anymore,” said Schroeder. “The mayor’s administration has indicated that the state has agreed to help the city financially. I hope that is the case, but the city still needs to fix the structural imbalance in its budget for the long term.”