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TAX INCREASE OF $3 TO $4 POSSIBLE IN 2001 BUDGET

City Council members Tuesday were told it would take a $3 to $4 tax increase to continue services at their current level next year.

Council Chairman Anthony F. Quaranto and Councilmen John G. Accardo and Charles A. Walker met with Mayor Irene J. Elia and members of her administration for a preview of her spending plan. Elia's first budget is due Oct. 2.

Members of the administration have been working long hours on the plan and still are making revisions. Last week, Elia issued an invitation to Council members to get an advance look.

Quaranto said some sort of tax increase appears inevitable.

While all city elected officials have said their goal for 2001 is no tax increase and no layoffs, Quaranto and Accardo have questioned whether both were possible, especially after news this summer that the city had a $4 million operating deficit in 1999 and ended the year with a $77,143 fund balance.

Quaranto said another $3 million to $4 million would be needed to keep staffing and services at their present levels. Raising that revenue without a new funding source would add about $3.67 per $1,000 of assessed valuation to the homestead rate and $4 per $1,000 nonhomestead.

This year's tax rates are $13.07 per $1,000 for homestead properties and $28.81 per $1,000 for nonhomestead.

"I'm sure they'll pare it down. Otherwise we've got a tremendous task," he said.

Quaranto said he had anticipated an increase of around $1 per $1,000.

"People might be able to take a little increase," he said.

Quaranto said he understands Elia has inherited a lot of the problems of the past, including tax decreases approved by the Council and the $4 million operating deficit, which was caused by settlement of a police brutality lawsuit and legal actions by city unions. He said the Council has tried to do the best it could for taxpayers and "if we had passed what we were given it would have been worse." If mistakes were made, the time to face them has come. There are even tougher decisions ahead and everybody has to "be ready to take some flak," he said.

To make matters worse, the contracts with all of the city's labor unions expire this year and negotiations are under way.

"If we can't cut this thing down, I don't know what we're going to go. The only other alternative is layoffs. If we've got these developers in the wings, I want to see them get going. We've got to show them we mean business," Quaranto said.

Development would help by adding to the tax base, which has been shrinking.

Niagara Falls Redevelopment has offered to prepay obligations due over the life of its eight-year contract. In exchange, it wants to extend the contract. Elia has resisted. Quaranto said he would be agreeable as long as there were strict performance deadlines attached. Even though the payments would constitute a "one-shot" revenue, it could give the city some breathing room, he said.

He said he also is trying to get a handle on the population count taken this year by the U.S. Census Bureau. The numbers will be significant going into the budget process, he said.

"If the population has gone down, we've got to make the decision on whether we want to continue to provide these services for the people who are left and raise taxes or cutback on services. We've got to hear that from the general public. They've got to tell us. We serve them," he said.

Elia could not be reached to comment.

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