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CITY HALTS BUDGET REVIEW, AWAITS WORD ON AID

Buffalo's budget process was abruptly suspended Friday, with officials hoping a two-week delay will resolve uncertainties over state aid and avoid huge tax increases or cuts in police and fire services.

For only the second time in more than a decade, the Common Council is expected to vote Monday to extend its May 22 deadline for passing a budget.

City Finance Commissioner James B. Milroy said approving a budget without knowing whether the state will provide accelerated aid and loans to restructure the police and fire departments would have a "terrible" effect on residents.

Without those funds, the city would have only two options -- both painful and politically unpopular.

One would involve raising property taxes to the constitutional limit -- an increase of about 20 percent. The other would mean cutting hundreds of jobs.

Because the police and fire departments account for more than half of the operating budget, layoffs in public safety would be imminent, officials said. When Mayor Anthony M. Masiello released his proposed budget two weeks ago, he warned that if the state failed to come through with aid to help restructure public safety services, the city would have no choice but to lay off 130 police officers and 120 firefighters. He further warned that if the services are not restructured and the Council refuses to make cuts, he would ask the state to impose a financial control board to take those tough steps.

Council members arrived Friday at City Hall expecting another grueling day going through the budget line by line. Some lawmakers were surprised when Majority Leader Rosemarie LoTempio announced that, after consulting with administration officials, she wanted to delay further action.

"There are just too many uncertainties at this point for us to make decisions," she said. "The process needs to stop until we know exactly what we're doing."

"(A delay) is the only responsible thing to do," Milroy added. "It doesn't make sense to take threatening actions without knowing for sure whether those actions will be required."

The two biggest uncertainties involve $20 million in accelerated state aid that would help to pay for the police and fire restructurings. Gov. George E. Pataki vetoed the so-called "spin-up" funding, and as of Friday, the State Legislature had not attempted an override.

The other question mark involves the city's push for state permission to borrow $29 million to help pay for the restructurings. Milroy said a team of state auditors is wrapping up a review of city finances and plans to report to state legislators next week. The report is expected to include recommendations on how much money -- if any -- the city should be permitted to borrow.

"Right now, we would have to reduce our revenue estimates to eliminate that $20 million, along with the borrowing," Milroy told the Council in making his case for a delay. "Just giving us this budget back would have a disastrous effect on the property tax increase."

Masiello's current spending plan would increase the tax levy by 7.2 percent, although tax bills for residential property would rise by 9.5 percent. Those for commercial properties would go up 4.4 percent.

Giving the Council until June 5 to pass a budget will be "cutting it close," LoTempio acknowledged. Masiello still would need time to consider possible vetoes, and the tax office would have to prepare, print and mail about 96,000 bills by the end of the month.

Some lawmakers complained privately Friday that Council leaders and the Masiello administration had kept them in the dark until the last minute about delaying the budget.

Since deliberations began three weeks ago, Council members have been debating hundreds of additions and deletions to the spending plan. Here are some of the highlights:

Lawmakers have cut $1.1 million, mostly, LoTempio said, in Common Council items.

The Council informally agreed Friday to restore funding to keep all nine senior citizen centers open and to retain the city's Youth Court Program.

LoTempio said city and county officials have renewed talks about a county takeover of Buffalo's advocacy office for the disabled and some youth services. Negotiations fell apart last week, but insiders said progress has been made in recent days.

Most Council members have expressed support for revising Masiello's proposed increase in the garbage user fee, although they have yet to reach a consensus on the changes. The mayor's budget would increase the user fee by 9.6 percent to 10.7 percent, depending on the size of containers.

e-mail: bmeyer@buffnews.com

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