The City of Mount Vernon is issuing Tax Anticipation Notes (TAN) to raise money it needs right now to meet payroll, pay vendors, and continue providing essential services without interruption, according to the city’s Comptroller Darren Morton. At Morton’s request, the City Council has approved issuing up to $7,300,000 in new short-term Tax Anticipation Notes debt backed by taxes it expects to receive.
Mount Vernon currently has approximately $3,217,895.14 in unpaid 2025 property taxes outstanding and is owed more than $50 million in taxes from previous years that have yet to be paid. The City Council decided that if all taxes anticipated to be collected have not been received by the time the notes mature, “the notes may be renewed as permitted by law until full repayment can be made.”
In a message on the city’s financial condition, Morton noted that Mount Vernon experiences what he termed “periodic cash flow challenges throughout the year.” He said that this year the city faced more financial pressure than usual because it had to pay more than $11 million for obligations made in earlier years and had to make advance payments that will be reimbursed later.
Morton said that no money was available from a fund balance that could be used to fill the current gap. He said that the $11 million in prior year obligations included $3.9 million in old school taxes from 2018-2019; $1.6 million in unpaid 2021 health benefit costs; $1.7 million in 2019 IRS payroll obligations; and $3.2 million spent on capital projects that the state and federal governments have yet to reimburse.
Morton said that his office is “reviewing every aspect of city spending to identify cost savings, including workforce adjustments, shared health care costs, and other efficiency measures, while ensuring that essential services continue.”
He said that the process of preparing a budget for 2026 has been slowed because of the financial squeeze.
“Developing a balanced and responsible budget under these circumstances has proven challenging,” Morton said. “The initial adjustments required were substantial and not suitable for presentation as a preliminary draft. Consequently, we have been refining the figures to produce a more realistic and sustainable financial plan.”
Morton said his office is doing everything possible to strengthen the city’s financial position, improve revenue collection, and control expenses. He identified a goal of restoring long-term fiscal stability while maintaining the services on which Mount Vernon residents depend.
