The new mayor in Syracuse, N.Y., is grappling with an escalating budget deficit that is expected to climb above $20 million next year while nearly wiping out the city’s fund balance.

Ben Walsh released a transition team report Wednesday detailing the dire financial conditions he is inheriting.

Walsh is an independent who replaced Stephanie Miner in early January. Miner, a Democrat, didn't run in November.

The report notes that the city has a projected deficit of $16.5 million for the end of the 2018 fiscal year, which would bring its reserves down to around $36 million for the start of next year’s budget. The fiscal 2019 budget gap is forecast at $24.9 million, according to Walsh.

Syracuse, N.Y., Mayor Ben Walsh speaking on Jan. 29, 2018
"We will not nibble around the edges of this problem," said Syracuse Mayor Ben Walsh. City of Syracuse

"Unless cost saving efficiencies can be found and additional revenue generated the City's reserves will be fully depleted by the end of the 2019-2020 fiscal year," the report says. “For the last several years, the City has been running multi-million dollar operating deficits with recurring expenditures outpacing revenues.”

The transition team made a series of short- and long-term recommendations to try and tackle Syracuse’s fiscal woes. Some suggestions included reviewing budgets of other cities in New York to determine untapped revenue sources, adding a hotel occupancy tax and renegotiating expired labor contracts.

Walsh said in his first State of the City address on Jan. 31 that he has convened a fiscal advisory committee to try and combat looming budgetary challenges. The committee, which includes a partnership between the city and faculty at Syracuse University’s Maxwell School of Citizenship and Public Affairs, is planning to release a recovery plan this fall.

"We will not nibble around the edges of this problem," Walsh said in his speech. "The solutions will not be easy, and hard sacrifices are coming."

Walsh noted in his speech that part of Syracuse’s fiscal predicament stems from the flattening of state funding known as Aid and Incentive for Municipalities. The city’s $71.8 million aid figure has not increased since 2010 while costs have risen about 12% in the same period when factoring in inflation, according to Walsh.

S&P Global Ratings revised the outlook on its A Syracuse general obligation rating to negative from stable last June citing the city’s reliance of spending down reserves to balance operations. Moody’s Investors Service rates Syracuse debt at A1 with a stable outlook. The Central New York city had a population of 145,252 in the 2010 U.S. Census.

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