Lackawanna Mayor Geoffrey M. Szymanski's proposed $24.5 million budget for 2012-13 would expand the city's payroll by adding a police officer, two firefighters and four public works employees.
The proposed budget is an increase of $1.2 million over the current budget -- although it would take in fewer dollars from city taxpayers and take advantage of a state offer to advance the city $2.6 million in state aid for the coming fiscal year.
The budget also shifts more of the property tax burden to city homeowners in an effort to ease taxes on businesses and spur commercial growth.
The move would increase the city's homestead tax rate by 7.7 percent, to $13.33 per $1,000.
Meanwhile, the nonhomestead rate would decrease by 10.7 percent, to $31.65 per $1,000.
The total tax levy would go down by $356,510 to $8.6 million. The current tax levy is about $8.9 million.
The tax burden shift already was approved Monday by the City Council, which expects to sign off on a final budget during a special meeting at 8 a.m. Saturday.
"It has to be done eventually because if we don't do it now, we're not going to have any businesses around to tax," Szymanski said of the homestead shift. "The business tax structure right now not only does not entice businesses to come here, it suffocates the businesses that are already here."
Szymanski noted that most area municipalities do not offer different property tax rates for residential and commercial properties.
"The bottom line is we have the lowest median income of the surrounding communities and the highest business taxes," said Council President Henry R. Pirowski, adding that small businesses find it difficult if not impossible to locate in the city. "This is something that's been put off for far too long. We don't have much more time to put off these decisions."
For a home assessed at $100,000, the rate increase would amount to about $92.
A business assessed at $100,000, meanwhile, would see a property tax decrease of about $380.
The shift also will apply to the Lackawanna City School District property taxes for 2012-13 -- meaning homeowners will face a significantly larger overall property tax bill, while business owners will notice sizable savings.
Szymanski said he wanted to hire two firefighters to help combat the accumulation of huge overtime tabs in the department, which could end up more than $200,000 over budget for the current fiscal year, ending July 31.
The mayor said the city's Department of Public Works was decimated by budget cuts in 2010-11, and he told Council members in a letter that the city "would have been crippled" by a major snowfall this past winter because of depleted staff in the department.
Szymanski also proposed an $11,000 raise for the city's assistant attorney -- as a way to save money by keeping more legal work in-house, rather than hiring outside counsel.
The mayor will have the opportunity to veto changes in the budget made by the Council. The Council then can override mayoral vetoes with a vote of four of the five members.
A final budget must be in place by June 30.