Buffalo Common Council wants city comptroller’s view of taxes - The Buffalo News
print logo

Buffalo Common Council wants city comptroller’s view of taxes

Buffalo Comptroller Mark J.F. Schroeder has offered a harsh view of Mayor Byron W. Brown’s budget proposal, saying it relies on millions in revenues that might not come and spends an unprecedented amount of the city’s surplus.

But what about taxes?

Schroeder isn’t saying.

And that’s what Common Council members, charged with voting on Brown’s budget proposal, want to know more about from him. Does he think the city should raise or lower taxes?

“I’m a little concerned that the comptroller hasn’t opined on the tax reduction,” said Lovejoy Council Member Richard A. Fontana.

“He is our financial officer,” Niagara Council Member David A. Rivera said of Schroeder. “I think he should be more forthcoming.”

The administration’s $504.5 million budget proposal calls for lowering property tax rates by half of a percent for homes and by 1.7 percent for businesses, projected to cost $1 million. It also calls for spending nearly $28 million from the city’s surplus to plug holes.

The city charter requires the comptroller to submit an assessment of the accuracy of revenues and expenses, said Patrick J. Curry, Schroeder’s executive assistant, who appeared before a budget hearing Monday.

“We did what the charter calls for,” Curry said afterward. “The policy decisions are up to the mayor and the Common Council.”

The Council hasn’t discussed major changes to the proposal, but Monday it raised the possibility of eliminating the tax decreases if doing so means avoiding future tax increases.

The Brown administration’s top financial officer acknowledged to lawmakers that tax increases are likely in future years.

“I think at some point in the future we will have to raise taxes,” said Donna Estrich, commissioner of administration, finance, policy and urban affairs.

The administration wants to cut taxes to encourage people to move into the city, she said.

Council members acknowledged raising or lowering taxes is a political one. Still, they want to know Schroeder’s opinion because taxes impact city revenues.

In his report, Schroeder estimated the mayor’s budget proposal contains $15.2 million of revenues the city might not gain, and he takes a dim view of spending $27.5 million of the city’s surplus. Relying on surplus is unsustainable over the long term, he said.

The city has a surplus of $166 million, of which $64 million is free and clear to be used for any purpose.

In addition to using $27.5 million in the 2014-15 budget, the administration’s four-year plan calls for using $25.2 million from the surplus in 2015-16.

Schroeder’s report warned that overestimates for some revenues could result in using even more reserves in the coming years.

“While many of the assumptions included in the budget are possible, the likelihood of all of them coming true is highly unlikely,” according to Schroeder’s report.

He also said the four-year plan lacks details.

The city’s unprecedented credit ratings are strong in part because of its cash reserves, Curry said.

The city has an A1 rating from Moody’s along with A+ ratings from Standard and Poor’s and Fitch, though all three agencies warned their ratings would fall if the city’s reserves become depleted.

If the city’s credit rating suffers, borrowing costs for capital projects could increase.

According to Schroeder, questionable revenue projections include:

•$5 million from the sale of city assets;

•$3.2 million from traffic tickets;

•$3 million in state grants;

•$2.2 million from construction permits.

The city has raised only as much as $2 million from the sale of land, vacant buildings and other assets in previous years. In the current budget year, the city budgeted $2.8 million in revenue from real estate sales, but so far only $500,000 has been raised.

The four-year plan projects the city selling $27 million in assets, which Curry called “a major concern.”

The additional traffic ticket revenue – it would be a gain of $2.7 million from prior year collections – assumes a change in state law to allow the city to adjudicate its own tickets. But so far there has been little movement on this in the State Legislature. If the legislation passes, it would not take effect until half-way through the city’s fiscal year.

The proposed permit revenue is more than double previous amounts.

State aid has been flat recently, but they four-year plan projects as much as 5 percent more in one year.

email: jterreri@buffnews.com

There are no comments - be the first to comment