October 5, 2011

Mayor’s 2012 Budget Calls for Austerity

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The City of Ithaca is facing its most constricted budget in decades, Mayor Carolyn Peterson said Wednesday night as she presented her 2012 budget to the Common Council.Among other reductions, the proposed $61,531,000 budget — Peterson’s last as mayor — includes a three percent decrease in spending across all city departments, a 24 percent increase in sewer and water rates, and 14.5 unfunded positions. Peterson’s budget also proposes a 4.02 percent tax levy increase — a rate just under the 4.17 property tax cap, the maximum tax hike for municipalities in New York State.Peterson and City Controller Steven Thayer agreed that unavoidable, large increases in pension and health insurance costs — which Thayer said cost “about a million dollars each, right off the bat” — were responsible for driving the budget problems.“Trying to fit that in with the property tax cap and with a community that’s already seen pretty high taxes as a result of our already high property tax exemption rates … trying to make this all work is obviously pretty challenging,” Thayer said. “We’re not excited about this budget, but we think it’s a way to start thinking about a way to restructure staffing levels and departments in the city of Ithaca.”In addition to these costs imposed on the city budget, Peterson also cited the 4.17 property tax cap — passed in June by New York State to protect citizens from large tax hikes — and decreases in state aid as reasons for tightening the 2012 budget. “The mantra has shifted over the years,” Peterson said. “It’s not about doing more with less; it’s literally doing less with less. You can’t get more out of less in these situations — it’s deciding what the less is we can provide to the community.”Thayer said that the “barebones” budget will slow city services to the community, especially street and road construction.“Instead of having in-house and outside contractors working on city streets, we will only have in -house workers doing construction on the streets,” Thayer said.While Peterson said the city budget contained mostly negative news, Thayer noted that the city is hoping to see higher contribution rates to the Police and fire departments, as well as an increase in sales tax revenue.“Without the sales tax revenue, we’d be in a much worse situation,” Thayer said. Peterson said that while she and Thayer agreed on much, she felt “the work should be left for the next administration.”“What started in this administration is a high level of frequent meetings and trying to figure out a good approach to budgeting and possibly blending with the departments and municipal arrangements for some of the work that has to be done,” Peterson said.Candidates for Mayor of Ithaca said that, despite the difficulties posed by the budget, they feel well-equipped for the monetary challenges that lie ahead.Wade Wysktra (I), former Commissioner of the Board of Public Works, said he saw economic growth and development as a potential way for the city to pull itself out of its current financial crisis.“We can’t cut or tax our way out of this,” Wykstra said. “We’re going to have to immediately start trying to grow the city by bringing in new jobs and departments. We need to work together to entice developers to invest in the city.”Wykstra also emphasized the importance of creating a 20-year capital plan to address the city’s financial priorities moving forward. “You have to have plans ready to go and set priorities,” Wykstra said. “And you have to be ready to adjust those plans if some priorities get funded before others.”Mayoral candidate Janis Kelly ’71 (R), chair of the City of Ithaca’s Republican committee, criticized the current administration for continuing the “same fundamental error they’ve been making for five years” and consequently increasing the amount of pension and health care that the city is obligated to fund. “The mayor and Common Council have treated the budget like a jobs project for government workers, instead of providing services or keeping taxes from going up,” Kelly said. “They are refusing to face the fact that we need to cut people from the city payroll.”Alderperson Svante Myrick ’09 (D-4th Ward), the Democratic candidate for mayor, said that he was not surprised by Peterson’s approach to the 2012 budget, and he was in support of many of the proposed components.“The budget proposes a moderate tax increase below the tax cap, responsibly dipping into the funds of our savings account, and reducing departmental spending as much as possible while still maintaining the ability to deliver services,” Myrick said. “It’s more or less what I’ve been proposing on my campaign.”

Original Author: Liz Camuti