Common Council nays the 2026 budget

At tonight's special meeting, the Common Council overwhelmingly rejected the budget proposal for 2026 by a vote of 8-3. Only Council President Tom DePietro (a member of the BEA and thus, alongside Mayor Kamal and the Treasurer, one of the architects of this budget) and Third Ward representatives Lola Roberts and Shershah Mizan voted yes.

What preceded the vote was, by Hudson's standards, a crisp exchange where grievances were aired across the aisle.

What's in the 2026 budget

The proposed budget contains a hiring freeze across all departments of the city while posting a deficit of $385,000 that would be leveled out out by dipping into the dwindling city's fund balance. Additionally, it stipulates a 3.9% increase of property taxes - the highest allowed by NY State law.

For comparison, the 2025 budget carried a deficit of more than $800,000 and still didn't meet its projected revenue targets which further diminished the fund balance.

Incoming Council President Margaret Morris initially pointed out a factual oversight in the proposed budget where the city-wide hiring freeze that would have eliminated two new positions in the Youth Department accidentally cut a unionized position that wasn't actually vacant, therefore requiring an amendment to the budget. City Treasurer Heather Campbell confirmed that the amendment that would reinstate this salary would in all likelihood have to come out of the fund balance. Morris proceeded to note that Hudson has had an imbalance of revenues versus expenditures for years: "I think it is time for us to come to grips with that and to go back and say 'no' - we have to look at what our revenue is and how much we can spend on our services to the public".

Members in the audience were equally unenthusiastic about the proposed budget. Fourth Ward Supervisor Linda Mussmann addressed the council directly: "You can argue about all the details of this budget, but you are asking the taxpayers to pay more and that's what you should be thinking about when you vote". Nick Zachos, former Director of Youth stated that the Youth Department needed not only the position that was cut as an oversight but also the currently vacant position of the Assistant Director because it was a position "that essentially helps to run the summer camp".

Mayor defends the budget

Mayor Kamal Johnson, who was present in the audience, justified the proposed budget: "The fund balance has been used every budget for the past ten years. The first three years we didn't raise taxes a single cent. The fourth year we raised it a bare minimum. This year we are raising it over the cap but it's still under what other municipalities are raising the taxes".

Going back ten years, the city used the fund balance to even out the budget only in 2021 and 2024. The neighboring Town of Greenport meanwhile adopted its 2026 budget on November 5, 2025 which included a property tax increase of only 1.8% without the need to make use of the fund balance.

What happens next?

The failed vote to adopt the budget means very little. The charter of the City of Hudson states that the current proposal will automatically be adopted 20 days after its initial presentation to the public if it fails to reach a majority in the council. The budget's presentation happened on Nov 10 during a special meeting of the Common Council and the window during which tweaks can be made to the budget therefore ends on Sunday, Nov 30. Given the Thanksgiving holiday, there isn't realistically any time, nor willingness, to make changes and on Dec 1, this budget will by default become the budget for the coming year.

The role of the fund balance

One of the main sticking points during this council debate was the city's use of the (unrestricted) fund balance. The fund balance acts as the main cushion to absorb unforeseen expenditures by a municipality. In Hudson, it has recently been going down, mainly due to previous budgets overestimating anticipated revenues, for example that of the lodging tax. Temporary dipping into the balance on the other hand is quite common as municipalities often need to advance certain funds for which they get reimbursed later. This is usually how municipal grants work: A city fronts the expenditures and gets reimbursed once the work has been paid for.

A depleted fund balance represent a significant risk to a municipality as it may no longer be able to absorb naturally occurring and often seasonal fluctuations in revenue. The good news is that municipal bankruptcies according to Chapter 9 are extremely rare, and even more so in NY State. It is very unlikely that the City of Hudson would ever be formally bankrupt but that is mainly because the state would step in first. Such an involvement generally spells trouble for a municipality as a state-appointed trustee with no local ties would temporarily take over and balance the budget by any means necessary. Those means are typically limited to cutting or reducing services that are not considered absolutely essential. In the case of Hudson, there's numerous line items in its budget that might fall under this category: the $400,000 earmarked for the Hudson Area Library, a similar amount spent on the maintenance and upkeep of Cedar Cemetery, or portions of the Youth Department's budget.