Glen Cove is back on the state’s fiscal stress list, as the city grapples with an operating deficit from 2025 and a separate, roughly $3.1 million, revenue shortfall in its current budget.
The state comptroller’s office designated Glen Cove as “susceptible to fiscal stress” after analyzing the city’s 2025 financial performance with its Fiscal Stress Monitoring System. The city received a fiscal stress score of 47.1, just above the 45-point threshold for the designation.
The monitoring system, created by Comptroller Thomas DiNapoli in 2013, is intended to provide local governments and taxpayers with an early warning of deteriorating financial conditions. It examines factors including year-end fund balances, operating deficits, cash on hand, short-term borrowing and fixed costs.
“Local governments are facing increased fiscal pressures,” DiNapoli said, citing inflation, rising operating costs, slowing sales tax growth and the end of federal pandemic aid.
Glen Cove was one of four cities statewide designated as susceptible to fiscal stress in the latest round of monitoring, along with Elmira, Johnstown and Schenectady.
Preliminary, unaudited figures included in a city bond offering show that Glen Cove ended 2025 with an operating deficit of roughly $1.52 million after four consecutive years of operating surpluses. The city had reported operating surpluses of approximately $789,000 in 2024 and $1.7 million in 2023. City officials attributed the state designation to the 2025 operating results and a negative unassigned fund balance.
“Fiscal year 2025 did not end as we had intended and unfortunately, we realized an operating deficit for the first time in four consecutive years of operating surpluses,” officials said in a statement provided by Roni Jenkins, the mayor’s Public Relations Officer.
The latest designation comes as the city confronts a separate issue in its 2026 budget involving roughly $3.1 million in anticipated sales tax revenue. The City Council voted in July 2025 to impose a 1.5 percent city sales tax, effectively taking half of Nassau County’s 3 percent sales tax on transactions in Glen Cove. The change ended a decades-old arrangement under which the county collected the sales tax and provided the city with revenue through a property tax credit. The 2026 budget relied on approximately $3.1 million from the new revenue source.
But the city did not receive a required waiver from the county in time for the change to take effect this year. The sales tax delay was also cited earlier this year when Moody’s Ratings downgraded Glen Cove’s credit rating to Baa2. Moody’s pointed to structurally imbalanced budgets, the city’s reserve position and elevated leverage among its financial challenges.
Anthony Basile, a professor of accounting at Hofstra University, previously told the Herald that Moody’s’ assessment reflected concerns about both the city’s budget deficit and its rising debt obligations.
City Councilwoman Danielle Fugazy Scagliola said the state designation was not unexpected.“It is not surprising that we received a credit downgrade by Moody’s and have been given the Susceptible to Fiscal Stress designation by the state,” Fugazy Scagliola said.
She argued that the city relied too heavily on aggressive revenue projections without maintaining sufficient reserves for unexpected expenses.
City Controller Michael Piccirillo wrote in an email that the city’s expenses cannot easily be reduced. “A significant amount of our expense base comes from uncontrollable expenses related to our workforce, such as NYS pension employee contributions, employee health care and related benefits and expenses.”
Piccirillo said that Mayor Pamela Panzenbeck’s administration works to eliminate wasteful and nonessential spending. The city has also re-evaluated fees for building and filming permits, parking tickets, property rentals and cellular antennas, he said, while pursuing additional recurring sources of revenue.
Former Councilwoman Marsha Silverman said the city needs recurring revenue to keep pace with expenses rather than relying on temporary sources of money. She questioned whether increases in fees represent the kind of new revenue the city needs, noting fees are largely still paid by residents and other local taxpayers.
County Legislator Delia DeRiggi-Whitton criticized the sales tax plan the city incorporated into its 2026 budget. “It was never brought before the County Legislature,” she said, “and taxpayers should never have been asked to rely on millions of dollars in revenue from a plan that had neither the votes [in the Legislature] nor the approval needed to become reality.”
Asked whether the sales tax revenue expected in 2027 would offset the current shortfall, Picirillo wrote, “We are hoping it yields better-than-anticipated results to help partially offset the shortfall.”
