Wallkill Faces Financial Struggle, Impending Tax Increases and Spending Cuts

WALLKILL, N.Y.—Wallkill’s supervisor said the town will raise the tax cap and operate more efficiently to address the municipality’s poor financial state.

Supervisor Frank DenDanto III said at a town board meeting on Oct. 22 that the town’s operating cost this year is $52 million but that it has only $43 million to cover it. A letter from the Office of the State Comptroller said Wallkill’s adopted 2026 budget is a financial risk.

The supervisor said the town could explore government spending cuts and tax raises to return Wallkill to financial stability.

“Everything is on the table. Everything,” DenDanto said at the meeting. “The goal, my goal specifically, is to not just correct the ship, but bail it out and make it solvent within three years.”

He told a public comment speaker, “It won’t be any more than $1,000 out of your pocket [to fix town finances].”

DenDanto said extensive cuts could even eliminate half the police department.

The comptroller’s report found that Wallkill lacked accurate, up-to-date accounting and financial records, which led to over- and underestimations of costs during budgeting.

For instance, the town overestimated revenue from hotel occupancy taxes, building permits, and mortgage taxes. These three alone represent a $1.7 million shortfall.

Metered water and sewer revenue were flagged as potentially underestimated, with a $277,000 shortfall in the 2025 budget. Estimated revenue for water and sewer remained at $5 million, the same as the 2025 budget, despite the year’s underestimation and the town’s water price increase.

The comptroller’s office found that the budget did not allocate funds for principal and interest on the bond anticipation note renewal. Wallkill underestimated bond renewal payments in 2024 and 2025, and the 2026 budget did not include the needed $1.8 million for those payments.

Wallkill lost its bond rating in 2024 when S&P Global could not obtain necessary financial information. DenDanto said that without the bond rating, the town cannot reasonably borrow money.

In June, state Sen. James Skoufis and Assemblymember Paula Kay secured $4 million in the state budget to keep Wallkill operating. DenDanto told The Epoch Times on Oct. 29 that $2 million of the state aid will arrive in the next few weeks.

He said the $4 million will allow the town to continue operating through the end of the year.

The town found that the fund balance, cash for emergency use, had dried up in January, the supervisor said. The town had no money for payroll, so it had to ask for the additional $4 million. By August, the town had brought its finances up to date and found a major financial gap that the non-existent fund balance was supposed to cover.

He said they discovered that the financial issues stretch back to 2016, and the major issues that caused the fund balance to dry up started in about 2022.

DenDanto told The Epoch Times that the town will likely raise property taxes over the state limit.

“Our current math is pointing towards roughly 10 percent above the [tax] cap,” he said.

The 2026 state tax cap, established by the Office of the State Comptroller, is 2 percent. This means that property taxes can be raised by 2 percent of what they already were. Local government boards must pass a law or resolution with a 60 percent vote to exceed the tax cap.

DenDanto said that the 2 percent cap was extremely low given the current rising cost of goods and services.

He noted that other major municipalities have raised their tax caps. The mayor of Albany has proposed a 15 percent tax increase, and the mayor of Middletown said in an Oct. 27 city meeting that the tax cap could be exceeded next year.

DenDanto, a Democrat, served as the Wallkill town supervisor from 2020 to 2021, and was reelected in 2025. He is running against Republican Jill Wilkins in the Nov. 3 midterm elections.

The previous town supervisor, George Serrano, created the 2026 budget in 2025.

Wilkins said in an Oct. 23 social media post that the public should be able to see the proposed budget before the elections, and not after.

“Call it a ‘budget gap’ or call it something else: if the plan is to fill it with our money, Wallkill families will pay the price. Residents deserve better than a massive proposed tax increase and unanswered questions,” Wilkins said.

Republican councilman candidate David Furlin told The Epoch Times on Oct. 27 that he opposes a massive tax hike as families deal with rising prices for necessities.

“We need to live within our means. You can’t spend more than you make,” he said.