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MASIELLO OPTIMISTIC ON AID INCREASE

Buffalo and other cities may be headed to their first increase in general state aid since 1989, Mayor Masiello and other city leaders said Monday.

"I'm walking away from these last couple of visits here realizing that our message is getting through and that there is some momentum now," Masiello said.

Masiello and other mayors met with legislators and aides to Gov. Pataki Monday and, while they saw some progress on revenue sharing, they said the state budget is limping along.

Assembly Speaker Sheldon Silver, D-Manhattan, said he is seeking at least $50 million for cities outside New York City. Senate Majority Leader Joseph Bruno, R-Brunswick, said $30 million should be put into the new state budget.

Pataki proposed $25 million for "distressed cities" before reducing that number to $10 million after the federal government did not give New York $2 billion in Medicaid and welfare savings that Pataki originally budgeted.

Pataki and Republican legislative leaders today proposed that Niagara Falls and other small cities receive their March 1997 state aid, a total of $100 million, four months early.

By giving these cities three aid payments instead of two, it helps balance their current fiscal years, according to Pataki. He announced the proposal this afternoon with Assembly Republican Leader Thomas M. Reynolds and Bruno. The proposal, if it is adopted by Democrats as part of the state budget, might cause some fiscal problems in 1997 if the state does not repeat this action next year.

For Niagara Falls, the Republican plan would mean an early $3.6 million, while North Tonawanda would get $1.5 million, Lockport $1 million, the City of Tonawanda $917,792 and Dunkirk $650,735. Jamestown would receive $1.8 million.

A similar "spin-up" was used in recent years to help Buffalo balance its books. Only small cities whose fiscal years run from January to December would be eligible those these funds. That would include most, but not all of the state's small cities.

Masiello said the Senate GOP also may add aid for city school districts in distress. Masiello said there have been no decisions on which cities would be budgeted and at what level.

"What we're asking for is a focus on the revenue sharing," said Albany Mayor Jerry Jennings. The mayors noted that, collectively, they have lost $3.3 billion since revenue sharing was reduced in 1989. To restore funding to the 1989 level, it would take $540 million, they said.

The fall of revenue sharing parallels the property tax rise, Masiello said. Ten years ago, Buffalo derived 40 percent of its budget from state aid and 19 percent from property taxes. Now, it's 25 percent state aid and 32 percent local taxes.

Although they won't say it publicly, many mayors say the state should forgo a scheduled $1.7 billion cut in income taxes if it means less state aid, and higher property taxes, for cities.

"We feel that there really has not been a tax cut in New York State," said Ed Farrell, executive director of the state Conference of Mayors and Other Municipal Officials. "Taxes have in fact gone up. The increases in real property taxes are far outstripping (cuts) that occur on the state side.

"If the state could cut its own taxes and still help us, that would be wonderful because we could also lower taxes," Farrell said. "But if the state cannot help us because they tell us they have no revenue, then we have to question whether that is really good for the taxpayers of New York."

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