Record level of sales tax revenue predicted by N. Tonawanda mayor
Published: August 31, 2009, 12:30 am
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NORTH TONAWANDA — Mayor Lawrence V. Soos’ proposed budget for next year predicts that the city will reap record sales tax revenue.
In addition, North Tonawanda is projected to see benefits from two yet-to-be-finalized deals with the New York Power Authority and a private corporation hoping to lease space at the wastewater-treatment plant.
Soos’ proposed $43.9 million spending plan relies on $7.5 million in sales tax revenue next year, an amount $225,000 greater than what the city budgeted to receive this year and about $540,000 more than what the city got in 2008, according to figures from the city Accounting Department.
A public hearing on the budget will be held at 6 p. m. Sept. 8 in Common Council chambers in City Hall, 216 Payne Ave.
The city’s sales tax revenue generally increases by $200,000 each year, City Accountant David R. Jakubaszek said. The new spending plan projects an additional $130,000 beyond the average increase, which is based on historical trends.
“I’ll say that this is more on the aggressive side,” Jakubaszek told The Buffalo News, “. . . but it’s within reason.”
Aside from the jump in anticipated sales tax revenue, Soos’ spending plan also includes cost savings at the city’s water and sewer plants, thanks to expected receipt of low-cost electricity from the Power Authority.
Soos has projected a cost savings of $200,000 next year, even though an agreement with the authority is still being negotiated.
The City of North Tonawanda is one of 17 members of the Eastern Niagara Power Project Alliance, a group of Western New York municipalities and school districts that has been seeking compensation from the authority for several years in connection with the new federal license for the Niagara Power Project.
“We’re still in negotiations with NYPA, and we were basically told not to talk about this stuff too much,” Soos said.
The alliance, which also includes the City of Lockport, and the towns of Amherst, Tonawanda and Grand Island, has received an offer from the authority, and expects to submit a counterproposal to them next week, said Soos, a Democrat.
Spokeswoman Connie Cullen said the authority has begun talking with the city about an energy-efficiency program but did not address any potential deal involving low-cost power.
Soos’ budget has been submitted to the Common Council for review. The Council has planned a budget workshop after its regular meeting Tuesday evening.
The proposed budget would reduce the tax rate to $12.57 per $1,000 in assessed valuation, from $12.62. The water and sewer rates were unchanged.
In addition to revenue from sales tax and savings in electricity costs, another source will provide both revenue and savings to the city.
The city is negotiating with Calgon Carbon Corp. to lease space in the wastewater-treatment plant and take over the carbon-regeneration process there. The move would provide revenue to the city in terms of the lease, as well as cost savings. The anticipated revenue has been budgeted as $200,000.
With a deadline for Council approval of Sept. 15, Soos’ proposals are facing some criticism.
The mayor’s sales tax revenue figure is inflated, according to mayoral candidate and City Clerk-Treasurer Robert G. Ortt, and could end up leaving taxpayers with a shortfall.
Ortt, the endorsed Republican candidate, said he initially proposed a sales tax projection of $7 million and later agreed to increase it to $7.2 million.
Anything higher than that, such as the mayor’s $7.5 million projection, cannot be credibly defended, Ortt said.
“I don’t think those are realistic numbers,” he said, pointing to current economic conditions.
Ortt also pointed to increased property values across the city, thanks to a citywide reassessment, which account for an overall increase in the total tax levy of $1.6 million.
Soos responded by contending that Ortt’s statements were political posturing and that Ortt did not raise any objections when the budget was being developed.
Ortt said that he had raised concerns during the budget process but that in the end, it is the mayor who must submit the proposal.
First Ward Alderman Dennis M. Pasiak and Third Ward Alderwoman Nancy A. Donovan, both Republicans, said they are wary of the sales tax projections. They also questioned whether the city should be banking on money for which there is no agreement in place, referring to the potential deals with the Power Authority and Calgon.
Soos’ administrative assistant, Jeffrey N. Mis, said critics had not made as thorough a review of the budget as the mayor had, while at the same time criticizing them for being willing to question the budget without offering solutions.
Council members have the power to alter the budget projections as part of the process, Mis said.
abesecker@buffnews.com
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