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Buffalo tops list of poor cities to get more aid

Buffalo's population loss and its poverty, among the most severe in the country, may have one positive consequence -- $12.8 million in new state funding.

The money, the first installment in a four-year, $57 million commitment by Gov. Eliot L. Spitzer, would help finance the city's economic development efforts. The increase, if approved by state lawmakers, would be the largest of any upstate city.

Buffalo Mayor Byron W. Brown praised the budget, saying, "There are a lot of good things in it for Buffalo." Among them, he said, is a 9.7 percent increase in state aid to Buffalo Public Schools and an increase in efficiency grant money for the city.

"The governor also has made a significant commitment to economic development, proposing $300 million [in funding statewide]. By bolstering the Empire State Development Office in Buffalo and housing the co-chair of that agency in Buffalo, I believe that bodes well for making the economy of our city more vibrant," Brown added.

The mayor is scheduled to testify on the budget recommendation on Monday in Albany before the legislative Local Assistance Committee.

Spitzer also set aside more money in his proposed budget for Niagara Falls, Lackawanna and Jamestown.

"A resurgence of the Empire State cannot occur without a resurgence of our cities, particularly those in the upstate region," Spitzer said Wednesday. The money, however, comes with strings attached, part of Spitzer's emphasis on linking accountability to increased aid.

Buffalo, for example, will be required to develop multiyear performance plans and to use its 9 percent increase for property tax relief, development projects or cost-saving technology reforms.

"I like his emphasis on accountability," said Assemblywoman Crystal Peoples, D-Buffalo. "We need to see what we're getting for our money."

Spitzer's first budget sets aside $50 million more for "distressed cities," with Buffalo getting the biggest piece of the pie. Rochester was second with $9.6 million.

The pool of money also includes 9 percent increases for Niagara Falls, $1.4 million; Lackawanna, $500,943; and Jamestown, $376,163.

Brown said the increase will allow the city to raise spending by 11 percent but give a tax break to homeowners and only slightly increase the rate for business owners.

Niagara Falls would receive a total of $17.18 million in state aid and Incentives for Municipalities money. Under Spitzer's proposal, the aid would still be available for tax relief, as well as economic development and technology investments, but the city would be required to develop a multiyear fiscal performance plan.

"If it passes, we know that we can also save taxpayers' money by being more efficient," Mayor Vince Anello said. "We would continue to introduce technology in the city that would improve our efficiency and our ability to provide services."

North Tonawanda also is getting more money, about $400,000, which Mayor Lawrence V. Soos said will go to good use. "I'm glad we are getting the money," Soos said. "I applaud the governor. I think it will pass in the Legislature . . . because our elected officials know that the municipalities back home really need the cash."

Under Spitzer's plan, New York City and 81 "high-wealth" towns and villages that had previously received aid will no longer receive it.

The increases in other cities ranged from 3 percent to 9 percent and are based on the municipality's level of fiscal distress. The criteria include poverty, population loss and the city's proximity to its real property taxing limit.

In each case, Buffalo was at or near the top.

A state analysis of those benchmarks put Buffalo's population decline since 1970 at 36.8 percent and its poverty rate at 26.6 percent, both among the highest in the state.

The city also is near the top when its comes to taxing limits, using about 92 percent of its constitutional ceiling. Only Niagara Falls, Lackawanna and Gloversville are closer to their limits.

"I applaud him for recognizing the importance of investing in distressed cities," Assemblyman Sam Hoyt, D-Buffalo, said of Spitzer.

Hoyt said Buffalo could end up with even more aid if lawmakers decide to add to the pool of money for poorer cities. "In the past, Buffalo's additional money came from the Legislature, not the governor," he said. "It's nice to start with an increase."

In Buffalo, the money is expected to go toward economic development initiatives, although details remained sketchy Wednesday.

Hoyt said Brown could use the money to build the business incubators he wants in the city, while Peoples mentioned Brown's push for more shovel-ready development sites.

The mayor also wants state money to tear down Memorial Auditorium, now vacant and mothballed.

In a letter to the governor earlier this year, he asked for authorization to spend $21 million to raze the former sports arena. The money had been earmarked for renovating the Aud into a Bass Pro store.

If state funds are forthcoming, the Aud could be demolished by early next year, city officials have said.

News Staff Reporters Gail Franklin and Emma D. Sapong contributed to this report.

e-mail: pfairbanks@buffnews.com

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>Taxes

*Cut local property taxes and save middle-class families a total of $6 billion over three years.

*Raises at least $70 million in fees, including a new deposit on noncarbonated beverages and higher motor vehicle fines. Also raises at least $450 million in mostly corporate taxes by closing what administration defines as loopholes.

Aid to municipalities

*Provide $50 million in aid and incentives to municipalities as part of plan to help revive upstate cities, towns and villages. In exchange, municipalities must agree to "fiscal performance plans" and provide tax relief, costcutting technology and economic development to retain and attract employers. Buffalo would receive $12.8 million in 2007-08.

Health care

*Provides $165 million over two years to provide health care coverage for 400,000 children without insurance.

*Makes it easier for Medicaid recipients to apply for and stay enrolled in the program.

*Calls for $1.29 billion in savings by cuts to hospitals and nursing homes and increased Medicaid fraud detection.

*Increases aid to schools by $7 billion a year by 2010-11.

*Provides all school districts with at least a 3 percent aid increase and directs more operating aid - $982 million for the coming fiscal year - to high-needs schools.

*Requires fiscal reforms and sanctions for continued failure, which could include closing as many as 5 percent of the state's schools and firing administrators and school board members.

*Provides a $1,000 tax deduction per child that could be used for private and parochial school tuition.

*No tuition increase for the State University of New York but increases operating funds by 4.6 percent.

*Increases the Tuition Assistance Program by $857 million but cuts TAP awards to college students without high school diplomas.

Other

*Expects about $200 million in revenues at some point this year by collecting taxes on cigarette and gasoline that Indian retailers sell to non-Indians.

*Gives mayors of Buffalo, Rochester and Syracuse representation on local school boards.

*Raises state debt from $48.8 billion to $52.6 billion.

*Increases the state work force by 2,468 employees, to 197,068.

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