Soaring health insurance costs, revenue shortfalls put pressure on Auburn's budget

AUBURN — When City Comptroller Mary Beth Leeson opened her 2025-26 budget update at the Jan. 29 City Council meeting, she acknowledged it wouldn't be good news.

"Everyone knows I haven't been painting the prettiest picture of late, and I don't think this is going to do anything different," she said.

The city of Auburn is facing a projected $1.2 million revenue shortfall and expenses are on track to be $800,000 higher than what was budgeted for in 2025-26. Instead of using $1 million from its dwindling fund balance, the city may need to use $3 million to close the gap.

One of the city's significant expenses is employee health insurance. After a 42% increase in health insurance premiums for 2025, Leeson budgeted for an 8% increase. Her reasoning was that she was not anticipating such a hefty hike after a large increase last year.

Because the city's fiscal year runs from July through June, Leeson had to make her best projection until October, when the city learned health insurance rates would increase by 14% — a $1.4 million increase.

Auburn City Councilor Craig Diego, while noting that health insurance costs increased by 56% over two years, called it "insane." Leeson responded that there have been discussions between management and union leaders about reining in the soaring health insurance costs.

"Obviously, it's important that we provide good coverage for our employees... but it has to be affordable," Leeson said, adding that when they had the 42% increase last year, she "never would've thought that we would need to do 14% again."

Auburn City Manager Jenny Haines said they will work with the Cayuga County Health Insurance Consortium to get a better projection for the upcoming 2026-27 budget process. Still, it won't be the final rate, which won't be released until October.

Auburn Mayor Jimmy Giannettino added that health insurance costs are a problem for private and public employers.

"We have contractual obligations with our employees and we have to live up to those, but there is ongoing discussion with employees, with the health benefits committee, understanding that this is not sustainable," Giannettino said. "It's not sustainable for the city of Auburn. It's not sustainable for any municipality. It's not sustainable for this country."

As one of the city's largest expenses rises, many revenue projections are missing the mark.

Auburn instituted a 5% hotel tax in 2025 and the current budget projects $475,000 in revenue from the tax. However, Leeson revealed that only $85,878 was collected in the first half of the fiscal year. Although she expects it will improve over time, the revenue shortfall will be $150,000 in 2025-26.

The city estimated it would receive $250,000 in on-street parking revenue, but so far has only collected $37,000. The collection of past parking tickets was budgeted to generate $305,000 in revenue, but the city reported $39,285 through the first six months of the fiscal year. (The city has stepped up its efforts to address the unpaid parking tickets, which totaled $600,000.)

One of the bright spots is Auburn City Ambulance, which Leeson says is projected to have a surplus at the end of the fiscal year. That has been achieved through savings on operating supplies and vehicle maintenance.

The city's fiscal year runs through June 30. The 2026-27 budget process will pick up in March, when Leeson presents a preliminary budget to the City Council. Department heads will present their budgets in April and final work on the spending plan will occur in May.

The City Council is expected to pass the 2026-27 budget at its June 4 meeting.

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