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Lackawanna City Council adopts $23.86 million spending plan with reduction in garbage fee

The Lackawanna City Council adopted a $23.86 million spending plan Tuesday night during a special session that will give residents a slight break on a controversial garbage fee implemented last year. The $6 decrease will reduce the garbage tax from $155 to $149.

“The sticking point was the garbage fee,” said Third Ward Council Member Joseph L. Jerge. “We ultimately need to get rid of it, but we can’t make it disappear and deal with it by continually dipping into our fund balance. There is a way to work it out but it will take a tremendous amount of time and effort to do that.”

In accordance with Lackawanna’s two-tiered tax rate system, the newly approved budget also calls for a 25 percent tax shift from commercial to residential, with homeowners facing a 2.7 percent hike in property taxes. They will pay 40 cents more, or $15.20 per $1,000 of assessed valuation, said City Comptroller Peggy Bigaj-Sobol.

Business owners, meanwhile, will pay 1.3 percent less in property taxes, meaning a 41-cent break, or $32.03 per $1,000. Every effort was made to prevent an increase in taxes to Lackawanna’s shrinking business community, Council members said.

“Abbott Road is beginning to look like a ghost town,” Jerge said.

The budget was passed, 3-2 vote, with Council Members Jerge, Annette Iafallo and Abdulsalam K. Noman voting for the budget.

Council President Henry R. Pirowski Jr., who is running for mayor, and Fourth Ward Councilman Keith E. Lewis, who is vying for Council president, opposed the spending plan.

“If we’re going to have a garbage tax it will go up every year, and that’s why I’m against it,” said Pirowski, who submitted an alternative spending plan that would have eliminated the garbage tax. “We are supplementing the tax with our fund balance, and there will be no end in sight.”

The garbage tax implemented last year generated an estimated $1 million, Bigaj-Sobol said.

Each of the spending plans under consideration Tuesday night proposed no layoffs.

Each reflected the recent $2.3 million payment in back taxes by Orchard Park developer Peter L. Krog on a 29-acre industrial site at 300 Commerce Drive. The land was purchased by Krog-owned GK Commerce Drive LLC on March 19, 2009 after the Erie County Industrial Development Agency took title in October 2008, said Fred K. Heinle, Lackawanna development director.

A tax assessment challenge by Krog was resolved in 2011. It reduced the property’s assessed value from $7 million to $4.1 million.

The Commerce Drive site consists of 253,000 square feet of space in the First Ward. Its two buildings – one at 170,000 square feet and the other at 83,000 – had recently been home to Great Lakes MDF until the company shut down operations in January 2008. The fiberboard manufacturing plant opened in 2001, when it was known as CanFibre, said Joseph G. Geyer, code-enforcement officer.

News of back-tax payment was greeted with relief by residents who attended the budget meeting.

“It’s like Santa Claus came to town,” said one resident.