LOCKPORT – The federal government may not be the only level of government facing a “fiscal cliff” in 2013.
The Lockport Common Council received the news Wednesday that a status quo budget, maintaining all current city workers, would produce a 25 percent property tax increase.
The aldermen all said they want no tax increase, which could be bad news for city employees. All five unions are due for new contracts at the end of the year.
“They know we’re coming, and we’re going to be asking for concessions,” Budget Director Richard P. Mullaney said.
The Council voted Wednesday to hold a public hearing on the budget Oct. 17. After doing so, the Council went behind closed doors to talk about the contract negotiations, which have yet to begin.
Alderman Kenneth M. Genewick, R-5th Ward, said there will be at least two budget work sessions next week. Whatever the budget looks like on Oct. 17, it’s likely to change again before the budget adoption, which has been scheduled for a special session Oct. 30.
Mayor Michael W. Tucker said it’s “not likely” that date will be changed.
“We are where we are because we didn’t raise taxes in previous years,” Mullaney said. “We used fund balance to balance the budget.”
The city ran general fund deficits totaling $3.5 million in the past three years, and used its fund balance to fill the gap, Mullaney said. The available fund balance for next year is $420,000, which isn’t much in a budget that currently stands at almost $25 million. “You don’t have any money to play with,” Mullaney told the Council. “There’s not a lot to be optimistic about.”
Mullaney said the state-mandated 2 percent property tax cap would allow the Council to increase tax revenue by about $300,000, but the aldermen took a hard line on that.
“I want to be at zero percent. We have a lot of work to do to get there,” said Alderwoman Anne E. McCaffrey, R-2nd Ward.
Genewick, McCaffrey, Alderman John Lombardi III, R-1st Ward, and Alderwoman Kathryn J. “Kitty” Fogle, R-3rd Ward, all said they oppose any resolution to exceed the tax cap.
The cost of salaries and fringe benefits constitutes 86 percent of the budget. Although the budget assumes an increase of only 1.63 percent in total salary costs, or $194,000, benefits are slated to rise 12 percent, or nearly $1 million.
The budget assumes the state-mandated pension fund contributions for police officers and firefighters will rise from $1.8 million this year to almost $2.4 million next year.
Pension contributions for other employees are to rise from $523,000 to $737,000. Medical insurance premiums are projected to rise slightly, from $4.3 million to $4.39 million.
Mullaney set a meeting Friday to work on projections for revenues other than property taxes.