City Treasurer Mike Gifford Monday night recommended the Common Council adopt the city’s $10.1 million 2010 budget without any changes at the council’s Dec. 21 meeting.
The council has been waiting since the end of October to see how much state aid the city would likely lose for 2010 before adopting a budget. The $10.1 million 2010 budget the council is expected to adopt includes about $1.4 million in anticipated state aid, unchanged from 2009.
Gifford said non-calendar municipalities, like New York City and Amsterdam that have fiscal years that don’t run from January to December, received a state aid cut of between 1 and 8 percent when the state Legislature passed the $2.7 billion deficit reduction plan last week. He said if the state cuts calendar cities by the same amount Johnstown will likely lose about $45,000 in state aid for 2010.
“At this point I think it’s best to just proceed and pass the budget as is,” Gifford said. “There is a $100,000 contingency line in the budget.”
The $10.1 million budget increases total spending by about 2 percent from $9.9 million in 2009. It would raise the property tax rate 2.4 percent, from $15.98 per $1,000 of assessed valuation to $16.36.
The city started its budget process with a projected 9 percent tax rate increase, thanks to $477,000 in increased personnel costs. Mayor Sarah Slingerland and the Common Council lowered the projected increase by applying $290,000 of the city’s fund balance — its unspent reserves from previous years — to the city’s budget and by estimating a 3.5 percent to 4 percent increase in sales tax.
The $10.1 million budget projects $3.25 million in 2010 sales tax revenue, up from $3.1 million in 2009. The fund balance withdrawal is expected to leave the city with approximately $800,000 in reserve at the end of 2010.
Another state aid concern of the city’s is whether New York state will be late with the approximately $1.3 million state aid check due to the city by Dec. 15.
Gifford said if state aid is late it will create a cascade of late payments for the city and might force some short-term borrowing to maintain the city’s cash flow.
He said he has about $500,000 worth of state pension fund checks sitting on his desk that he would normally submit to the state sometime in December to get a slight discount for filing them early.
Slingerland said she’s confident in Gifford’s recommendation that the state won’t cut state aid more than 3 percent. She said if the state is late with its aid it will force the city to pay some of its bills later than usual.
“It’s certainly not something we like to do, if we’re forced into doing this by New York state,” she said.
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