BUFFALO, NY — Joseph Hernandez, Republican candidate for New York State Comptroller, today said Moody’s decision to drop the City of Buffalo’s credit outlook from “stable” to “negative” is the latest proof that fiscal mismanagement is spreading across New York, and that Albany’s watchdogs are asleep while it happens.
This week, the credit ratings and research firm Moody’s revised Buffalo’s outlook to negative, citing ongoing fiscal pressures, declining reserves, and the city’s continued reliance on one-time revenues to paper over budget gaps. Buffalo’s reserves fell by $14.5 million in Fiscal Year 2025 alone, a decline Moody’s flagged as significant compared to similarly rated cities. Moody’s now joins S&P and Fitch, which both cut Buffalo’s outlook to negative last year.
“This is what poor fiscal management looks like,” Hernandez said. “Declining reserves, structural budget deficits, and a city balancing its books with one-time revenues. That’s not a financial plan, it’s a budget held together with just temporary fixes.”
The negative outlook comes just two weeks after Buffalo taxpayers were hit with the consequences of that mismanagement. On July 1, Mayor Sean Ryan’s 19% property tax increase took effect, a hike so large the city had to override New York State’s 2% property tax cap to impose it. Hernandez, who warned against the tax hike in March, said Buffalo residents are now paying more and getting a worse credit outlook in return.
“Mayor Ryan told Buffalo families that a massive tax hike was the price of fixing the city’s finances. They’re paying that price, and two weeks later, Moody’s went negative anyway,” Hernandez said. “Taxpayers are being squeezed to cover for years of failed budgeting, and the bond market is telling us it still isn’t enough. That’s because you cannot tax your way out of a structural deficit any more than you can bail your way out of one.”
Hernandez said Mayor Ryan is responsible for allowing the city’s finances to deteriorate to this point. Beyond the tax hike, Ryan’s administration leaned on an additional $40 million in state funding from Governor Kathy Hochul pushed through amendments to the state budget. Buffalo’s own City Comptroller projects a deficit as high as $80.3 million this fiscal year if budgeted one-shot revenues fail to materialize.
“And where was Comptroller Tom DiNapoli?” Hernandez said. “A true fiscal watchdog doesn’t wait until a rating agency raises the alarm. The job is to identify financial risks early, demand corrective action, and protect taxpayers before borrowing costs rise and fiscal options become more limited. He’s had nineteen years to do that job. When I’m elected, that silence ends.”
Hernandez renewed his pledge, first announced in March, that as State Comptroller he would require a full audit of every municipality that overrides the state property tax cap.
Hernandez pledged that as State Comptroller, he would conduct aggressive independent audits of municipal finances, publicly report structural risks before they become downgrades, and hold local officials accountable for budgets built on one-time gimmicks.
“A negative outlook means higher borrowing costs, and higher borrowing costs mean fewer dollars for streets, police, and schools,” Hernandez said. “Buffalo families are already paying 19% more just to stay in their homes. It won’t be Mayor Ryan or Governor Hochul who pays the bill for this downgrade, but will be those same working families. Where billions flow, audits must follow.”