Turning the Tide: Little Falls’ Path from Fiscal Peril to Recovery

OpEd By Mayor Deborah Kaufman

The New York State Comptroller’s Fiscal Stress Monitoring System (FSMS) report for the fiscal year ending (FYE) 2024 labels the City of Little Falls in “significant fiscal stress” with a score of 78, up from 75 in 2023. This sobering designation reflects historical data, not the transformative reforms my administration has driven since I took office in January 2024. It’s a snapshot of a downward spiral inherited from years of mismanagement, but it misses the bold steps we’ve taken to reverse course. Little Falls is not defined by past challenges; we’re forging a brighter, more stable future through transparency, accountability, and prudent fiscal leadership.

Let’s confront the hard truths. From 2022 to 2024, Little Falls endured a steep fiscal decline. Our FSMS score lingered in the “moderate stress” category in 2022 before escalating to “significant” in 2023 and 2024, driven by low fund balances, operating deficits, and heavy reliance on short-term debt. An independent audit conducted shortly after I took office revealed a $2.8 million deficit across our general, water, and golf funds—a hole deepened by years of borrowing to mask shortfalls rather than addressing root causes. A 7% population decline since 2015 eroded our property tax base, while inflation drove up costs for infrastructure and employee benefits. Early in my term, I received a jarring call from the state pension fund: the city had failed to make payments for two years, necessitating an immediate $3 million financing plan of $30,000/month through 2028 to catch up.

This wasn’t a sudden crisis but a slow erosion fueled by poor oversight. The State Comptroller’s audits in 2019 and 2024 issued 12 critical recommendations to stabilize our finances—from adopting a formal fund balance policy to improving budgeting and enhancing Common Council communication. Shockingly, the prior administration implemented none of these over five years. Transparency was virtually absent: financial reports were opaque, public updates were rare, and residents were left uninformed about the city’s dire condition. As the Comptroller’s report notes, cities like ours face higher stress rates, but Little Falls’ trajectory was worsened by inaction.

That changed in January 2024. My administration made fiscal recovery our top priority, treating the Comptroller’s recommendations as a roadmap to resilience. By December 2024, we had implemented 11 of the 12 recommendations, completing the final one—a robust general fund balance policy—in January 2025. This policy ensures reserves remain sustainable, preventing future raids to plug budget gaps. We overhauled budgeting processes for greater accuracy, incorporating multi-year projections to anticipate challenges like revenue losses from population decline.

Communication with the Common Council has been transformed through regular briefings and real-time financial data access, fostering unified decision-making.
Transparency, once a weakness, is now our cornerstone. We’ve launched live streaming of all Common Council meetings, enabling residents to watch from home. Our new city Facebook page delivers real-time alerts and updates, a first for Little Falls. The city website is refreshed hourly with budgets, reports, and meeting minutes, ensuring every citizen can access audit findings and financial statements without barriers. These changes rebuild trust and empower our community to hold us accountable.

The FSMS score of 78, based on FYE 2024 data, lags behind our progress. But results are emerging. In July 2025, the state approved deficit financing legislation for Little Falls, recognizing our commitment to reform. Two weeks ago, we secured a $3 million Bond Anticipation Note (BAN) to eliminate deficits in our general, water, and golf funds, ending the cycle of short-term borrowing that plagued us for years. This deficit fund liquidation, paired with our new policies, enables us to rebuild reserves and invest in infrastructure, shared services, and economic development to curb population loss.

Little Falls, with its rich Erie Canal heritage and vibrant downtown, is a resilient community. We’re not ignoring the FSMS warnings; we’re acting on them. While statewide challenges like slowing sales tax growth and the end of federal pandemic aid persist, our proactive measures make us stronger than ever. Future FSMS scores will reflect this turnaround, but more importantly, our residents will experience a stable, transparent government that serves them.

As your mayor, I’m committed to sustaining this momentum. We’ve righted the ship and are charting a course toward prosperity. Little Falls is no longer spiraling downward—we’ve stabilized and are rising with a foundation built for the future—a city of fiscal strength and community pride.

Deborah Kaufman is the Mayor of the City of Little Falls.