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MASIELLO BUDGET PLAN CUTS TAXES
WOULD INCREASE GARBAGE USER FEE 8%

Buffalo's property tax levy would remain unchanged, and tax bills would actually decrease slightly for most property owners under Mayor Anthony M. Masiello's proposed budget for the fiscal year that starts July 1.

But the garbage user fee would go up by 8 percent, an increase Masiello blamed on Erie County's decision to return operations of a garbage transfer station back to Buffalo.

Masiello was scheduled to release what he calls a "good news budget" this morning. The spending plan calls for no layoffs but would cut 85 vacant jobs. Aid to city schools would be kept at this year's level -- $68.7 million.

Masiello noted that spending is down $13.7 million from the current year.

For the first time since 1997, most property owners would see a slight decrease in their property tax bills. Residential rates would go down by 3.4 percent, while commercial rates would decrease by 3 percent. The owner of a home with a $60,000 assessment would see a $44 reduction in taxes.

Finance officials estimated that about 90 percent of all property owners would see tax decreases. About 10 percent of properties recently reassessed at higher rates would see their tax bills go up. The $178 million increase in the city's property values means the city can spread its levy over the larger base, allowing for a slight reduction in rates.

Masiello said it's also the first budget since the state control board was created that does not require Buffalo to borrow money to fill gaps. This year, the city borrowed $19.1 million to make ends meet. The mayor insisted that his political intentions "have no bearing at all" on how he shaped his spending plan.

The $384.5 million budget includes the $68.7 million contribution to the schools, $284.8 million in general city spending and $31 million for debt service.

A $13.1 million increase in state aid, coupled with new efforts to hold down increases in health insurance and pension costs, has helped to ease some of the city's fiscal pressures.

Finance Commissioner James B. Milroy said the 8 percent increase in the garbage user fee would cost a homeowner who has the largest size tote an additional $12.61 a year. Earlier this month, Milroy was predicting that the fee might have go up between 10 and 15 percent. "We've looked through all the line items, and we've tried to get the cost down as low as possible," Milroy said.

The higher fee will offset costs associated with the city's taking back the East Side Transfer Station on South Ogden Street. The county has operated the facility for four years, a move that saved Buffalo about $1.8 million annually. But the county recently decided it can no longer afford to operate the facility.

Milroy said the decrease in property tax rates would more than offset the user fee increase for most property owners. He said most people will be sending a little less money to City Hall in the coming year.

Some administration officials conceded that it might be difficult to get enough Common Council support to increase the user fee. The charge for garbage collection has increased by about 40 percent since 2003.

As in recent years, Masiello's spending plan includes no aid to cultural and other not-for-profit groups. The city stopped funding outside organizations shortly after the 2001 fiscal crisis erupted.

Still, the mayor's spending plan is likely to generate far less controversy than the "spread the pain" budget he released a year ago. The 2004 plan included a 20 percent increase in the garbage user fee, a county takeover of all city parks and proposed cuts at senior centers and in the city animal shelter. Milroy said the new spending plan proposes no reductions in senior services or cuts at the animal shelter.

Masiello also disclosed Thursday that ongoing efforts to shrink the Fire Department will continue without the need for layoffs.

The Council has until May 22 to make additions and deletions to the spending plan, and lawmakers will begin budget hearings Monday.

Some Council members already have threatened to push to withhold some aid to the Board of Education if unions block efforts to put all school district employees under a single health insurance provider.

e-mail: bmeyer@buffnews.com

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