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2002 BUDGETS' SPENDING ABOVE INFLATION RATE

Consumers may not be heeding President Bush's advice to continue spending, but a number of local governments are doing just that.

Many towns and small cities in Erie and Niagara counties have proposed 2002 budgets that increase spending above the cost of living -- and would charge taxpayers for it -- at a time of fiscal uncertainty and turmoil.

For some, the increased spending proposed for next year is a result of the growth of their town, and the growing tax base is subsidizing much, or all, of the higher costs. For others, costs are increasing while revenues are decreasing.

"It appears there is an unwillingness to make tough decisions and to change," said County Executive Joel A. Giambra, who repeately has expressed concern that tax increases hurt the local economy.

The Buffalo News surveyed the 2002 spending plans of 12 of the largest towns and three small cities in Erie and Niagara counties. Several municipalities have adopted their 2002 budgets. Most are scheduled to be adopted by Nov. 20. Only general and highway funds were reviewed for the towns. Special-district budgets were excluded because they vary greatly within each town and from town to town.

The review found:

Tax rates in six of the 11 Erie County municipalities surveyed are projected to be above inflation. Tax rates are not as much of an issue in Niagara County, where governments rely more on sales taxes than property taxes.

The total spending increase in four budgets is below the consumer price index increase of 2.89 percent. Two others are below 3 percent. The other nine budgets exceed inflation, sometimes by two times, and in one instance by three times, the cost of living.

Eleven supervisors and mayors would receive raises next year, none above 3.5 percent, except for the City of Tonawanda mayor, whose salary increase from $25,000 to $32,000 was set several years ago. Four of the top executives would not get raises.

Town supervisors filed their proposed 2002 budgets less than three weeks after the Sept. 11 attacks caused an already shaky economy further tremors.

Sales tax revenue was slipping even before the attacks in New York City and Washington, D.C., Giambra said. Meanwhile, the state notified municipalities recently that their contributions to the employee retirement system will increase to make up for declines in the stock market.

"Crisis builds opportunity," Giambra said. "The problems of local governments were significant before Sept. 11; they're exacerbated now."

Several supervisors took the economic downturn into account when putting together their budgets. Hamburg Supervisor Patrick H. Hoak, for example, said his town projected a 16 percent reduction in sales tax revenue.

"Not only are we not counting on an increase, we're projecting a decline," Hoak said. "We hope we're wrong. If we're wrong and the economy flourishes, that bodes well for the taxpayer."

Several supervisors also said they recognize that increasing taxes is not the best alternative in the unsteady local economy. Many also note they are dealing with fiscal concerns specific to their communities.

Clarence Supervisor Daniel A. Herberger blames his town's tax increase -- the highest in Erie and Niagara counties -- on bond payments for the town's new library. Without the library, the tax rate would have remained the same instead of going up 10.49 percent, he said. It was partly the growing population that caused the demand for the new library. And it was that same growing population that expanded the tax base and kept the tax rate increase smaller than the 17.8 percent increase in the tax levy.

"The more people you have, the more services you have to provide," Herberger said.

Another community facing a double-digit tax rate increase is Cheektowaga, an older suburb without the residential growth of Clarence. Cheektowaga's tax rate would go up about 15 percent, with a spending increase of 7.5 percent.

"I don't like it," Supervisor Dennis H. Gabryszak said.

He said the increase is due to factors such as police retirement buyouts expected to cost $600,000 next year, a 15 to 20 percent increase in health insurance costs, sewer construction debt and some needed equipment.

A few towns were able to keep taxes under control. In fact, the Town of Tonawanda -- another older suburb with a stagnant population base -- has reduced its reliance on property taxes from 50 percent of its budget four years ago, to 45 percent in the upcoming budget, Supervisor Ronald H. Moline said.

That has been possible, he said, partly because of revenue-producing facilities such as the golf dome.

This year, the town was able to keep spending under control and the tax increase minimal, Moline said, despite a loss in tax revenue from the NRG Huntley power generating station.

Other communities that kept tax increases in check tend to be growing communities.

Lancaster was able to keep tax rates flat, by using some reserves and because its tax base is expanding. Orchard Park was able to reduce the tax rate slightly because of the same reasons, according to Supervisor Toni Cudney. Both towns are expecting to get a larger share of sales tax because of their increased populations. Still, Cudney is being conservative with sales tax revenue projections while predicting a tough year ahead.

"I think we really have to say the handwriting is on the wall and hope it is on the wall in chalk so we can erase it," she said.

But West Seneca Supervisor Paul Clark doesn't blame terrorists for his town's 8.78 percent tax increase.

"We would have been very close to that increase had the tragic event never happened," he said.

After a number of years of average tax increases of less than 1 percent, West Seneca found itself forced to raise taxes substantially more this year, he said.

Northtowns Bureau reporter Susan Schulman contributed to this report.

e-mail: bobrien@buffnews.com

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