CITY NEWS - 12/05/07 - City cuts tax rate hike to 7.8 percent

(As published by Cortland Standard, Aimee Milks reporting)

A new proposal offered Tuesday would reduce the 2008 city tax rate increase to 7.8 percent, down from nearly 10 percent.

Common Council members will vote Dec. 18 on the amended budget offered by city Director of Administration and Finance Andy Damiano.

“This has been a very trying situation for us,” said Mayor Tom Gallagher.

Damiano said the tax rate increase was reduced by 2 percent by taking out money from the city’s reserves.

“All the city employees contribute a percentage of their health insurance, which is placed into the reserves. We appropriated an extra $135,000 into the budget,” Damiano said.

Damiano added that the city always takes $200,000 of the money from the employee’s health insurance out of the reserves and puts it into the budget. However, he said this year he thought they had enough to take out $335,000, which cut the tax rate increase by 2 percent.

With the initial 9.8 percent tax rate increase the city’s 2008 budget was at $16.8 million, and would be the same with the 7.8 percent increase.

After the amended budget was presented, the council discussed further ways to cut the tax rate increase down from the new 7.8 percent figure.

“The problem is that there are so many people in the city that can’t afford a 10 percent tax increase,” said Alderwoman Val VanGorder (R-1st Ward).

Alderwoman Susan Feiszli (D-6th Ward) suggested the council turn the budget over to the department heads to cut another $60,000 to $70,000 out of each individual budget for a total of $200,000.

“I think the problem of what the council faces is not in appropriation but revenue,” Damiano said. “This council is focusing on one year. We really should have raised the taxes 20 percent and we managed to cut it to 9.8 percent by shorting the people in this room the money they need to run their departments.

“Even if we cut the raise to 2 percent, it does nothing for our financial future” Damiano added. “We can’t keep putting the burden on department heads … I am already asking them to operate with unreasonable numbers. I am basically asking them to do the impossible.”

If the Common Council does not have a majority vote to accept the amended budget with a 7.8 percent increase, then the 9.8 percent increase will automatically go into effect. However, the council can further amend the budget.