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Grand Island residents may see no increase in their town tax rate next year under a preliminary budget proposed by Supervisor Peter A. McMahon Tuesday.

Under McMahon's $4,284,684 spending plan -- down from this year's budget of about $4.5 million -- the tax rate would remain at $2.49 per $1,000 of assessed valuation.

The plan projects the smallest of increases in the town's total general fund tax levy in 1999, about $1,000 more than the current figure of $1.39 million.

McMahon, a Democrat, said the budget -- his first as supervisor -- was prepared with an eye toward holding the line on taxes and increasing the town's general fund surplus, which will have dipped to a pre-planned level of $225,000 by the end of this year.

But by the end of 1999, the surplus will have bounced back to the $340,000 mark, McMahon said.

"We need to be fiscally responsible, and that means we need to respond closely to what our financial advisors recommend. We got a little bit low (in 1998)," said McMahon, who was joined in presenting the proposal by town accountants Leo Moser and Robert Shea.

Moser and Shea said the town's ideal general fund balance at the end of a fiscal year would be 10 to 15 percent of the total budget.

"We're not back to where we ought to be, but at least we're headed in the right direction," McMahon said.

The proposed budget reflects the fact that the town's taxable assessed valuation rose slightly over the past year, from $559,296,974 in 1998 to a projected $560,632,975 in 1999, an increase of less than 1 percent, McMahon said.

Also included in the preliminary budget are salary increases of 3.5 percent for all town employees, including unionized workers, department heads, Town Board members, and the supervisor. Currently, Town Board members make $18,562, and McMahon, $56,213.

If Town Board makes no changes to the projected tax rate before the final budget is adopted, it will be the second consecutive year that the town's taxes have remained stable.

Councilwoman Mary S. Cooke, the senior Republican member of the board, said Tuesday's work session was the board's first look at the completed budget proposal. There will now be a period for amendments to be suggested by board members, she said.

A public hearing on the proposed spending plan will be held Nov. 5 in Town Hall, and the board will vote on the budget Nov. 16.

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