Dunkirk’s $13.7 million bailout from New York state has been approved with objections from the senator who represents the city.

“(Thursday), Albany Democrats forced through a bill that does nothing but plunge the City of Dunkirk deeper into debt, without any reform, oversight, or accountability,” said Sen. George Borrello, R-Sunset Bay. “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 Gov. Kathy 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.”

Since March 2024, the city has been reeling when it comes to finances. In December, the council approved an 84% tax increase for this year to cover costs.

But before that could happen, a loan from the state — since the city’s credit was so poor — was needed to get it through last year.

“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,” Borrello said. “In fact, Dunkirk’s bond rating — which had already fallen to BBB-, the lowest investment-grade level — was completely withdrawn.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.”

On Wednesday, three council members came out opposing the loan, including two — Nancy Nichols and James Stoyle — who have been along for the ride of the fiscal crisis that began in 2020, when both first took office. Both approved budgets and purchases during the time period while Nichols justified using $300,000 in federal funds through the American Rescue Plan Act for bonuses for workers and elected officials.

“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,” Borrello said. “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.”