NIAGARA FALLS – The city’s impending fiscal disaster has been averted for at least one more year.

City lawmakers Monday voted to uphold the majority of their spending cuts to Mayor Paul A. Dyster’s budget, ensuring homeowners will see no tax increase in 2013.

“We took the mayor’s disaster budget and brought it down to reality,” said Council Chairman Sam F. Fruscione. “With no tax increase, restoring most jobs and critical services, we’ve fulfilled our goal.”

While the lawmakers overturned the majority of Dyster’s vetoes to the $96 million budget, two Council members were able to restore roughly $400,000 to the budget before the budget was adopted.

Most of the restored funds came from budget lines for tourism, economic development (two jobs), equal employment (one job) and Fire Department overtime.

“When you’re talking about moving the city forward, there’s certain things you have to have in place,” said Councilman Charles Walker, who voted with Councilwoman Kristen M. Grandinetti to restore the funds.

Those funds will be administered through a newly established contingency account, controlled by the Council, which totals about $700,000.

Despite those restorations, the majority of the Council’s $3 million in cuts withstood the veto process – enough that homeowners will see no tax rate increase, and businesses will see a 95 cent decrease per $1,000 of assessed value, officials said.

“The taxpayers and business owners of Niagara Falls are finally going to receive some good news,” said Councilman Glenn A. Choolokian.

The Council was able to plug the budget gap primarily through cutting funding to USA Niagara Development, the state’s regional economic development arm. The city contributes roughly $3 million to the agency each year.

The Council also received a round of applause and plenty of handshakes for restoring all union jobs to Dyster’s original budget. Fewer than 10 city workers will now be laid off, and seasonal employees can be hired because no union positions were cut.

Dyster, who vetoed the USA Niagara cut, sought to portray the move as a shortsighted attempt to balance this year’s budget at the expense of future progress.

“I have concerns about not where we ended up but how we got here for the future,” Dyster said. “For me, trying to figure out how we get out of a hole starts [today].”

The mayor said he had concerns about the Council’s cutting the salaries of the city administrator and city engineer. He said the Council has slashed the salaries of his appointees each year of his tenure.

“In some cases, this has become very personal, and that’s no way to run government,” he said.

The city has been hobbled by a gambling dispute between the state and Seneca Nation of Indians, which has withheld $60 million in casino slots revenue from the city as part of the fight. Both the mayor and Council said the city’s budget problems don’t look much better for next year. Dyster said city government needs to shrink as expenses increase.

“You can’t keep going on like this forever,” the mayor said. “You delivered good news for this year, but looking down the road, there’s some major dark clouds on the horizon.”

Added Fruscione, “It’s not going to get any easier.”