Lackawanna, N.Y. (WBEN) - The City of Lackawanna is following suit with a number of other municipalities across Western New York with regards to a proposed increase in the tax levy as part of the city's operating budget for the 2024-25 fiscal year.
During a public hearing held at City Hall this past Thursday, Mayor Annette Iafallo laid out a resolution asking the Lackawanna City Council to override the state's guideline of a 2% tax levy cap and consider an increase in the tax levy of 23.6%.
"The City of Lackawanna has seen a lot of great economic development growth in the last couple of years, in combination of the Bethlehem Steel complex and city-owned properties, and revenues are starting to be generated from that. But unfortunately, in today's environment, the revenues that are coming in from those new economic development projects are being far outweighed by some expenses and losses of other revenues that are seriously impacting the budget," said Marketing and Communications Director for the Lackawanna Mayor's Office, Chuck Clark.
As outlined by Clark, there are a couple of areas that have caused an impact with the increase in the tax levy in Lackawanna.
"One is a loss of upwards of $4.3 million in aid related to managing weather emergencies and the pandemic through the American Rescue Plan money. That revenue stream, if you will, has fallen off, and the the other revenues the city would generate through things like fines and code enforcement, things of that nature, are nowhere near growing at a pace to offset that revenue," Clark explained with WBEN.
"A second aspect is out of a $34 million budget, about 90% of the budget is related to escalating contract costs for things like union labor, utilities and other purchasing. And the vast majority of that is related to the union labor, and that is mostly in areas of public safety and public works."
A third element contributing to the tax levy increase pertains to certain funds not being available to benefit the public.
"Historically, the city has always been able to put anywhere from a $1 million-to-$2 million in fund balance to the budget to the benefit of taxpayers, to lower the budget or keep it consistent. In this particular year, we're not able to do that because the city incurred, from the January storm, over $1.8 million in snow removal and damage cost - when I say damages, people's curbs, sidewalks, grass, things of that nature - and all of that is absorbed by the city with no federal, state or county reimbursement," Clark noted.
When adding those three pieces together, Clark says they far overshadow the positive work happening to bring new economic development to the city.
When looked at on an assessment level on a residential property (e.g., a residential assessment of $125,000) the increase will translate into about $473 annually, or about $40 a month. Clark says the reaction to that will be based upon an individual's economic circumstances.
"Some people, $40 a month is manageable. To other people, $40 a month is a challenge already. So it's kind of all across the board there," he said.
Thursday's public hearing was the first part of the process toward finalizing the city's operating budget, which officially goes into effect on Aug. 1. The City Council will need to vote on the proposed local law and the finalized budget by the end of this week.
The process this week will be similar to when Buffalo Mayor Byron Brown presented his city budget, followed by the response of the Common Council to negotiate potential changes ahead of its required final vote.
"The City Council, being the legislative and the fiduciary overseers of the city's finances, do have the ability - just like the Buffalo City Council did - to make changes to the mayor's budget," Clark explained. "I can't speak, at this point, for what they exactly will do, but their options are they can pass the budget as proposed, they can make minor changes, they can make major changes and anything in-between. That dialogue, I know, is ongoing between the mayor and the Council, so it's still a work in progress. But obviously given the days that are drawing short here in the month of June, that work needs to happen quickly. So it's still a work in progress. The Council has a number of scenarios that they're evaluating, and we will know more in the coming days."
During Thursday's public hearing in Lackawanna, a number of residents spoke out against the proposed increase in the tax levy, citing that a number of community members are already struggling to make ends meet, and this will only put a strain on more people.
"Raising taxes is probably not a good idea. I mean, gas prices are ridiculous, grocery prices are beyond ridiculous. And now you're going to look at your tax bill and, from what I looked on that, you're looking at almost $1,000 across the board for most of the houses in the city. So you're talking $500 first half taxes, $500 second half, and that's only going to go up," said Dr. David Zambron. "And we know taxes never go down, I think everybody has pretty much known that. You don't really see taxes ever go down, they just go up. And I understand there's inflation, I get that, everybody has to make more because costs are going on. But at the same time, I think before we vote to increase our taxes, I think we need to look at what we can cut."
"This tax increase will have a significant impact on every single person who lives here," added resident Ian Schroeder. "When it comes to the current inflation rate, it is 3.27%. Any increase over 3.72% is utterly ridiculous. It puts additional strains on families. It costs a family $748 more a month in expenses than it did two years ago. Now we want to talk about increasing taxes... I strongly advise we vote against this. We find ways to cut, and we move on from there."
One resident at the public hearing said the City of Lackawanna needs to do a better job managing its budget when times get tough like many people do when they have important expenses they need to take care of on a regular basis.
"We've got to do better with the money that we have," she said. "Just like I tell my husband, we have two children, we have to live on what we have. And this city should learn to live on what we have. It's not everybody else's responsibility to pay my extra expenses. You shouldn't be asking us to pay your extra expenses."
Another local resident has her questioning the mayor's message to residents during her State of the City address several weeks back.
"What happened? The city union address was so positive, we had money, things were happening. And now all of a sudden, we're in a hole?" she questioned. "I read the city's union addresses. I found it very helpful, promising. You made a lot of positive statements in there. And all of a sudden, now we want the taxes raised. I don't understand it, so I would, along with everybody else, like to know why. We have ideas of what happened, but if you can't be forward in those comments and answering us, I don't know."
Clark and the rest of the Mayor's Office say they understand the tough economic times not just in Lackawanna, but all across the country. They feel the news of this proposed tax levy increase may be understood by most residents, but not well received on all fronts.
"Nobody wants to pay more, especially when they're already taxed on everything - when I say taxed, I mean stressed - from things like groceries and gas and utilities, and what have you. The pressures that everybody's facing either with their business property or a residential property to maintain their expenses are affecting the city as well," Clark said.
Clark adds the biggest issue for Lackawanna going forward is the city is a landlocked community with only a finite amount of room to grow and develop. That's why the biggest impact with these increases will be felt amongst residential properties and not commercial properties.
"There are about 6,400, maybe a little more, in terms of taxable properties in the city, so we're dealing with a small base. If you compare that to Buffalo, for example, they've got over 90,000 taxable properties. And again, we're not trying to necessarily one-up or one-down Buffalo - I'm just making a comparison of the size of the city - we're dealing with the same pressures. So if you look at 6,400 taxable properties, about two-thirds of those are residential," Clark explained.
Clark says, at this time, there has been no date set this week for the City Council to vote on the proposed city budget.