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Schenectady council unsure how to cut budget for no tax hike

Saturday, October 26, 2013
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— Members of the Schenectady City Council are still wondering whether they can shave enough off the proposed 2014 budget to be able to offer taxpayers no tax increase next year.

Council members met for an early Saturday morning budget workshop, but ended it much the same way they ended a budget workshop the day before — unsure where they would cut to bring down next year’s tax levy. Finance Committee Chairman Carl Erikson hoped to take a straw poll on each proposed change to the budget, but with Councilwoman Marion Porterfield absent, that poll will wait until next week.

Erikson’s proposed $1 million cut in the city’s health insurance costs appears unlikely, although council members agreed it’s the only cut that would achieve any real savings. Other cuts range from $10,000 for Social Security contributions to $125,000 for settlements, and when combined could put a dent in the tax levy.

“How could we possibly gamble with this?” asked Councilwoman Leesa Perazzo. “2013 is the first full year we’ve been self-insured, and I just think it’s way too volatile to cut $1 million from that. If you look at any other business, and you look at their health care costs from year to year, ours is a small increase.”

In 2013, health care costs were budgeted at $15.1 million. They’re set to rise $100,000 in the proposed 2014 budget — a number Perazzo said is significantly smaller than most businesses ever see.

“I think we need to study this for another year,” she said. “I’m sorry, but I don’t think it’s worth the risk. We’re talking about people’s health care here. I would love to have a zero-percent tax increase, but I don’t want to put our staff’s health care at risk to do it, especially having not even completed a full year of being self-insured and being able to see the data. I can’t support that.”

Erikson continued to lobby for the million-dollar cut and said at the very least, the council should be able to safely cut $300,000.

With council members Peggy King and Denise Brucker on Perazzo’s side and Vince Riggi on Erikson’s side when it came to health care, the members pointed out that even if Porterfield were there to take a straw vote, they would at best be deadlocked on the proposal.

“We would have to figure out a way to get through a deadlock,” said Erikson. “I don’t know where Marion falls on the issue, but I strongly feel we should be pulling a couple hundred thousand out of that line as a reduction. It’s the biggest money-mover of all these lines, and it might be the driving factor behind how someone is to vote on the budget. So if we are split 3-3 on that line, then we might be split on the budget.”

Finance Commissioner Deborah DeGenova calculated a new tax levy based on items council members could agree on Saturday, and came up with a 1.46 percent increase, as opposed to the 2.2 percent increase under the current proposal.

The council members said they could get more done this week, when Corporation Counsel John Polster is expected to provide more information on several proposed changes.

“Any tax increase is too much of a tax increase,” said Perazzo. “But being realistic, I think we have a responsible budget for the public to consider.”

 
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comments

October 27, 2013
8:16 a.m.
gina99 says...

Perazzo has no business or financial expertise to make any tough cuts. If the Council had followed Erickson and Riggi and rejected Karen Johnson's County sales tax sell out the City would be looking at 15% tax DECREASE.

October 27, 2013
5:09 p.m.
nanmossey says...

Where do you get that? Leesa Perazzo has quite bit of business expertise to bring to the table. She is practical and responsible, and tends to look for long-term solutions.

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