Budget Meeting: 'Be prudent' auditors urge council
Robert Cagnassola of Suplee, Clooney & Co. explained that the state mandated caps during the 1970s to limit the growth of expenditures. Since then, the rules have at times tightened or loosened, he said, but still municipalities must honor the cap law.
The reason for making an increase now is that the 2006 fiscal year budget has changed significantly.
Since budget talks began several weeks ago with a projected 2.1 percent increase in municipal taxes, the city has learned that state pension costs will drive the increase up to 2.7 percent.
Recently the city was told that anticipated sales of city assets in the form of delinquent taxes would come in lower than expected, because the city’s rate of collection has improved and therefore lessened the amount of back taxes owed. So now the city can only expect to garner $300,000, half the amount realized last year.
Because of the drop in revenues, the projected tax increase has now risen to 7.34 percent.
‘The prudent thing to do is to pass the ordinance and give yourselves the latitude to use it next year if necessary,” Cagnassola said. “You don’t have any other well to go to.”
The council plans to introduce the $61 million budget on Sept. 6 and will apply for extraordinary state aid for tax relief by Sept. 16.
After introduction, the council can modify the budget, but news of state aid may not come through until October, the auditors said.
A wild card in the process is contract resolutions.
Outstanding contracts may come in at more than a 2.5 increase, Cagnassola said.
“Give yourselves the discretion,” he said in urging the higher cap.
Of several bargaining units, the major unresolved contract is with the Police Division, which accounts for about 20 percent of city costs. The police union, Local 19 of the Police Benevolent Association, has not had a contract since 2002.
The council had scheduled budget deliberations twice a week, but will take a holiday break. City Council President Linda Carter said Tuesday (Aug. 23, 2005) the budget talks will not resume until after the Labor Day weekend.
KEYWORDS: city council, budget, taxes