Upstate city electeds Thursday put the pressure on state leaders to put more unrestricted aid in budget for municipalities as several consider tax increases to overcome double-digit budget deficits.

As Gov. Kathy Hochul and legislative leaders near a final deal, local officials said $3 billion the governor wants to spend on one-time inflation "refund" checks for low- and middle-income families would be better spent making localities whole.

"We're the ones who provide essential services every single day," said Syracuse City Auditor Alexander Marion, a Democrat. "Police, fire, water, and in the snowiest city in America, we have to plow the roads every year ... we need to make sure New York state is investing and delivering those essential services."

Several local governments have proposed tax hikes this year, from 18.8% in Watertown, 8% in Buffalo, 6.4% in Olean and 2% in Syracuse, which has a structural deficit between $25 million and $30 million.

Marion said Hochul's proposal to spend $3 billion on one-time inflation "refund" checks won't mean much with higher property taxes.

"Local governments increasing taxes directly contravenes Gov. Hochul's affordability agenda," Marion said. "By investing money in local governments, that's a way to put money back in people's pockets. Supporting local governments with more aid and support is going to make a difference in people's lives directly."

Multiple lawmakers said the checks are expected to be slimmed down from the governor's proposal.

"These checks would be spending out of the reserves or one-time use," state Assemblyman Alex Bores said Thursday. "I think for many families that could be a huge help to them, but that money could also go to helping the MTA or to keeping the rainy day fund large in case we see cuts from the federal government. We're just trying to make sure we are being responsible in what we are sending out especially with the threats we see coming from the feds."

Hochul proposed to keep Aid and Incentives for Municipalities (AIM) funding flat this year at $765 million after a $50 million increase last year.

Officials said while they're grateful for the bump, it hasn't given local governments what they need.

"When you have inflation that's at 8 or 9% that it was the last few years but you can only raise revenue 2% more, the numbers just don't add up," Auburn Mayor Jimmy Giannettino told Spectrum News 1.

Marion has led the charge to increase direct support to cities, towns and villages since the Senate proposed $877.8 million for AIM in its one-house budget, and proposed to create a commission to change the formula.

Introduced by Gov. George Pataki in 2006, the formula was supposed to be an increasing scale of aid every year between 2.5 and 7.5%, depending on how the local government handled property tax hikes. But when the Great Recession hit, that didn't happen.

Giannettino wants lawmakers to tie the formula to inflation and take tax-emept and state-owned properties into account.

"There hasn't been a permanent increase in 16 years," he said, adding tax-exempt properties shift a greater burden to other taxpayers.

"Typically, you look at a hospital or a nursing home, they use our services whether police or ambulance and they're not paying taxes," the mayor said.

Stephen Acquario, executive director of the state Association of Counties, said localities across the state are struggling to fund ambulances, needs for senior citizens and more as the federal government considers cuts.

He said eight counties breached the state's 2% property tax cap increase in 2025.

"That's more than double in any given year how many counties would be forced to increase their property taxes above the state property tax cap," Acquario said. Usually we'd see none, one. Highest two or three. This year we had eight."

Giannettino said he tried to testify about the issue at a budget hearing last year, but was denied by the Legislature denied due to time constraint.

Giannettino said he and other local officials said they expected Gov. Hochul's past experience serving as Erie County clerk and on a town council would make her more focused on funding for localities that would work for the longterm.

"When she became governor, I can tell you myself and colleagues across the region were hopeful because she had come from local government," he said. "It hasn't translated, unfortunately."

Hochul Press Secretary Avi Small said the governor has "invested more in localities than any governor in recent history."

"... Her FY26 Executive Budget proposes nearly $800 million in direct financial assistance to municipalities," Small said in a statement. "But that's not all: because Gov. Hochul is making record investments in public education, health care and transportation infrastructure, local governments and school districts have fewer costs to cover out of their own budgets. Gov. Hochul promised to put money back in the pockets of middle-class New Yorkers, and she's not backing down from that fight."

EDITOR'S NOTE: This story has been corrected to reflect updated Division of the Budget figures on Gov. Hochul's proposed AIM funding.