(WNY News Now) – A controversial $13.7 million state-backed loan to Dunkirk has passed the New York Senate along party lines, sparking fierce criticism from Senator George Borrello, who warns it will deepen the city’s fiscal crisis.
ALBANY, NY — Following the party-line passage of S.8413, legislation authorizing a $13.7 million state-backed loan to the City of Dunkirk, Senator George Borrello issued the following statement:
“Today, Albany Democrats forced through a bill that does nothing but plunge the City of Dunkirk deeper into debt, without any reform, oversight, or accountability. Not one Republican supported it, and for good reason: it’s not a solution, it’s a state-sanctioned debt trap.
This bill, introduced by Brooklyn Senator Andrew Gounardes at the request of Governor Hochul—despite Gounardes being over 400 miles away from Dunkirk—authorizes a 7.5% interest loan that will cost taxpayers nearly $10 million in interest over 15 years. That’s on top of the city forfeiting its $1.5 million annual AIM payment, which currently funds essential services, just to make the loan payments.
And what’s it for? To cover a $12.7 million Revenue Anticipation Note (RAN) that comes due in July, a debt the city is unable to pay due to years of overspending, overdue audits, and chronic fiscal mismanagement. In fact, Dunkirk’s bond rating — which had already fallen to BBB-, the lowest investment-grade level — was completely withdrawn. That’s the equivalent of being blacklisted in the municipal finance world. And yet, Democrats’ response is to hand over more borrowed money with no strings attached.
Three out of five Dunkirk City Council members oppose this plan. They’ve publicly stated their preference for a financial control board, something my legislation, S.7497, would have created. A control board would be able to issue bonds to generate funds for the city at a lower rate than 7.5 percent. They would also bring in experienced fiscal oversight, enforce transparency, and chart a real path to solvency. Instead, the governor and her allies rammed through a bill that bypasses the Home Rule process and ignores the very people it claims to help.
Ironically, while the mayor has publicly opposed the idea of Albany exerting control through a financial control board, this loan does exactly that but without any of the benefits. It strips the city of its AIM funding and locks it into a long-term repayment plan dictated by the state, yet provides none of the professional fiscal oversight, guidance, or transparency that a control board would bring. It’s state control without the structure and that’s a recipe for continued failure.
The residents of Dunkirk have already endured a punishing 84% property tax hike. Their city’s tax levy jumped from $5.3 million in 2024 to $9.7 million this year. Now they’re being handed more debt, more risk, and no reform.
This vote was a betrayal of public trust and financial common sense. The people of Dunkirk deserve real solutions, not a payday loan dressed up as policy. I will continue fighting for what this community truly needs: accountability, oversight, and a path to long-term stability.”
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