City Council members decided Tuesday that the city will have to raise even more through taxes than planned for 2005.
Mayor Sam Teresi told the City Council that the county's plan to reduce sales tax on clothing and footwear to 4.25 percent will hurt the city, at least initially.
Last Wednesday, the Legislature voted 24-1 to lower the clothing tax rate. The lone "no" vote came from Teresi's father, Legislator Anthony Teresi of Jamestown. The County Legislature also has approved increasing the overall county sales tax by 1.25 percent. Revenue from that increase will be used to cover costs of the state-mandated Medicaid program.
While the State Legislature still has to approve the county's request, Teresi said the city needs to be prepared for what might happen.
"The information that we have at our disposal and what is likely to happen is that this (clothing tax) will be eliminated, and if we don't do something if and when that happens, I don't think we will have been responsible," he said.
Teresi said he would rather the Council "err on the side of caution" than not prepare at all.
City Comptroller Joseph Bellito said the changes could take effect as early as July 1.
"We believe that the city will lose $250,000 on an annual basis with a reduction of the clothing and footwear sales tax. Based on those numbers, the Council decided to reduce the sales tax budget estimate for next year by $100,000."
Ironically, the Council earlier had agreed to raise the sales tax estimate by $50,000, meaning it would only have to lower its projections for next year by $50,000 overall.
Because of that, the Council was forced to raise the tax rate increase projected for 2005 from $1.72 to $2.23 per $1,000 of assessed value to cover the revenue loss. That's a 3.8 percent tax rate increase, which will add around $40 to the average tax bill.
The good news for city residents is that the James Prendergast Library is safe from budget cuts, for now. Over the past few weeks, Jamestown residents have written and voiced their concerns over planned funding reductions for the library. Originally, the Council's Finance Committee had suggested cutting $18,000 from the library's budget, and then $10,000.
City resident Janet Forbes told the Council at a public hearing Monday night that the library is an invaluable resource to the community.
After listening to the nearly dozen people who spoke, Finance Committee Chairman James McElrath made a decision to keep the library's funding at $370,000.
McElrath later proposed that the Council restore the funding, and the suggestion was unanimously approved.
In other business, the Council agreed to table a vote on adding four new firefighters to the force until next year, when a grant could cover the cost.
The Council's vote on the $26.73 million budget is set for Dec. 6.