By JOSEPH KELLARD
City Manager Charles Theofan said that the budget cuts taxes by 2 percent, which will mean a $35 to $70 tax decrease for homeowners. The city’s projected surplus for next year is $600,000. “This budget is giving back while at the same time retaining a prudent surplus for any unanticipated consequences that might occur,” Theofan said.
Theofan and Comptroller Sandra Clarson said that the city saved money by consolidating in areas like employee training, safety equipment and furniture expenses. For example, Clarson explained that in the past, most departments have had a separate line in the budget for training, but this year they were combined in one line that required Theofan’s approval. “Instead of one department buying 20 desks and another buying 30, we’re going to put it out to bid and buy it all as bulk and save that way,” Clarson said. “We cut 10 percent off.”
Council member Lenny Remo, a Democrat who took part in creating the budget and approved it, said that the only place where the city can continue to control costs without major cuts in services is in its contracts with police, firefighters, CSCA and lifeguards.
“Everyone says, ‘Cut costs, cut costs, cut costs,’ but as soon as you say, ‘Fine but we have to cut services,’ they then say, ‘Can’t you cut costs without cutting services?’” Remo said. “No one wants to hear that cutting taxes means a reduction in services.”
Clarson noted that next year’s budget increases retirement benefits for CSCA employees by $100,000 and for police by $200,000, and that while the cost of Social Security benefits remains at $2.2 million, health insurance has gone up $200,000.
According to resident Rich Boodman's calculations, the budget actually increases taxes 18 percent rather than reducing them by 2 percent. Citing the city’s 2005 spending plan as a benchmark — the year before the Democratic-controlled City Council imposed a 25 percent tax increase — Boodman said, “The Republicans took control of City Hall in 2008 because they said they were going to roll back the 25 percent tax increase of 2006. Instead, we’re paying more taxes than ever before. For every $100 we paid in taxes in 2005, we’ll be paying $184 this year. At this rate, our taxes will double every five years. That's not my idea of a tax reduction.”
Remo said that the 2006 tax increase enabled the city to extend its plan to keep taxes down through this year and possibly 2010-11. “That was designed to balance the budget that year and create a tax stabilization plan to carry it for another six or seven years,” he said.
But fellow Democrat Denise Tangney, the lone council member who voted against the budget, charged that the Republican-controlled council is paying the city’s bills with the 2006 surplus. “I’m not happy with using surplus money, which is non-reoccurring funds, to pay for reoccurring bills,” Tangney said. “Eventually that money is going to run out, and I think it’s a poor way of managing. I think that money should have gone back to the people.”
Theofan countered that if the city didn’t use surplus money to reduce taxes, taxes would have to be raised. “The following year, you would assume that you’d be looking at that same level of taxation,” he said. “Well you’re saving the people from having to pay it for one year. So that is giving the money back.”
Tangney also contended that the budget fails to account for a shortfall in the general fund of about $11 million. “To paint this rosy picture that we have all this money and we have so much that we’ve balanced the budget and we’re going to give you 2 percent back, I think, is misleading the public that we’re fine when we’re not,” she said. “We’ll see how fine we are when $11 million doesn’t come in.”
Clarson said that most of the shortfall will be made up with federal, state and county aid, due later this year. “We will probably get them in the third quarter, in mid-June, and the fourth quarter, in mid-August,” she said, “which is why we keep our books open until then.”
Comments about this story? JKellard@liherald.com or (516) 569-4000 ext. 213.
