A new report from the Office of the State Comptroller paints a portrait of Kingston as a city that has leveraged grant funds and sales tax revenue to make major investments that have transformed the city into a thriving center for tourism, arts and culture. But the report, compiled by the Comptroller’s Local Government and School Accountability Unit, also points out a major crisis in housing affordability and potential impacts from increases in the city’s debt load over the past decade.

State Comptroller Thomas P. DiNapoli was in Kingston Thursday morning to unveil the new fiscal and economic profile at an event with local elected officials and civic leaders. In his remarks, DiNapoli praised Mayor Steve Noble, who took office in 2016 and is now in his third four-year term, for helping to place Kingston at the forefront of innovation in local government on issues like housing, infrastructure and clean energy.

“A lot of leaders have vision, but not every leader knows how to turn vision into reality,” said DiNapoli. “[Noble] recognizes that a lot of the work was happening before he became mayor, but he took the reins of leadership to take things to the next level.”

The report offers an economic snapshot of Kingston based on a wealth of data on things like sales tax revenue, median home prices and municipal expenses. The data shows that the city has benefited greatly from increases in sales tax revenue during and since the pandemic when Kingston emerged as a destination for both tourists and new residents. In 2023, sales tax made up 26.3 percent of the city’s total revenue compared with 19.4 percent in other New York cities outside of the five boroughs.

Data on city expenditures in 2023 meanwhile shows the city spent slightly less that other New York communities on general government and public safety while spending more on transportation and sanitation. The city’s heavy investment in arts and culture is reflected in the wide disparity between Kingston and other cities on culture and recreation with the category making up 9.8 percent of total expenditures in 2023 compared with 4.2 percent elsewhere. (The report notes that the bulk of the difference in 2023 was linked to the city’ investment of $5 million into the recently completed renovation of the Dietz Stadium sports complex).

The report also looked at Kingston’s budgetary management, noting that the city had experienced rapid growth of its reserve fund — a budget line used to address unexpected expenses or fund special projects — from $3.1 million in 2013 to $12.3 million a decade later. The increase in the reserve fund has allowed the city to purchase short shelf-life items like police cars with cash instead of issuing bonds and adding to the city’s debt load. Despite that, though, the report found that the city’s debt had ballooned from $33.6 million in 2013 to $102 million by the 2024. The report found that the bulk of the added debt was linked to bonds issued to fund improvements projects at the city’s wastewater treatment plant and bring the Cooper Lake Reservoir into compliance with state regulations. Other major drivers of city debt included the Dietz Stadium project and another renovation effort at Kingston Library.

Despite the increase in debt and a nearly 9 percent tax hike for 2025 — the first significant increase in the tax levy since 2016 — the report found the city on solid financial ground. DiNapoli himself noted that the city had never fallen into “fiscal stress” as defined in an annual assessment process instituted after the 2009 housing crisis. The report added that the overall health of municipal finances was reflected in the city’s AA- bond rating, according to S&P Global Ratings.

“This rating reflects S&P’s opinion that the city’s outlook is stable due to a growing local economy, stable management, consistent budgetary performance, strong reserves and low debt service costs,” the report reads. “Although its pension and other post-employment liabilities are elevated.”

The comptrollers’ assessment also looked at the city’s housing market and found that that while homeowners had seen near-unprecedented increases in the value of their properties, the approximately 52 percent of Kingstonians living in rental housing faced daunting financial challenges. The study found that between 2018 and 2023, the median home prices in the city had surged by 63.7 percent, nearly twice the statewide rate of 33.3 percent. Despite the increase, the median home price in Kingston in 2023, $277,900, remained well below median home prices in other Mid-Hudson cities ($399,400) and statewide ($403,000).

The report found that rents had grown along with property values increasing by 25.5 percent between 2018 and 2023. Soaring rents have left more and more Kingstonians “rent burdened” — defined as paying more than 30 percent of total income for housing. Overall, 53.7 percent of city residents were rent burdened in 2023. Of those, 30.4 percent were severely rent burdened — paying more than 50 percent of their income for rent. Perhaps surprisingly, those numbers were just slightly higher than those for other Mid-Hudson cities and statewide.

In its conclusion, the report credits Kingston with employing “innovative strategies” and making major capital investments while “remaining mindful of fiscal and budgetary impacts.” The report also took note of the city’s “multi-pronged approach” to the housing crisis including instituting a new zoning code and implementing tax breaks for some types of affordable housing. But the report also pointed to changing fiscal landscape that included the expenditure of the last of pandemic recovery funds, state aid that has not kept pace with inflation and slower growth in local revenue that were likely to pose challenges for municipal governments across the state in the coming years.

“Prudent management of Kingston’s budget, as well as a continued focus on long-term planning, should enable investments in infrastructure and services to ensure sustainable economic growth continues well into the future,” the report concludes.