Dueling Budget Amendments Not Too Far Apart

When the New Rochelle City Council meets next Tuesday it will likely vote on amendments to the proposed 2011 budget.

At a recent meeting, the council discussed two sets of amendments—one from the Democratic majority and one from the Republican minority—both of which would slightly change the tax rate increase if implemented.

"We are talking about a very narrow range of differences here," said Mayor Noam Bramson.

The Democratic amendments would lower the tax rate increase from 3.9 percent to 2.27 percent and increase the fund balance by $350,000.

Under the Republican amendments, the tax rate increase would climb from 3.9 percent to an estimated 3.91 percent, while increasing the fund balance by $703,000.

The total spending in the originally proposed 2011 budget was $143.7 million, down $12.1 million from the revised 2010 budget. Operating fund expenses decreased almost $1.4 million to $107.1 million.

The tax rate was to be $176.96 per $1,000 of assessment, an increase of 3.9 percent. At the time, City Manager Charles Strome said the increase was equivalent to less than a 1 percent jump to the average homeowner's combined city, county and school district tax bill, or $113 per year.

Councilman Richard St. Paul, R-District 4, said he wanted to increase the fund balance to ensure the city's bond rating did not decline.

"Our bond rating makes it easier for us to bond," he said, and it will beless expensive for the taxpayers."

The city manager's original budget recommended financing the $700,000 in tax givebacks out of cash. The Democrats' amendment would finance the entire amount and put $350,000 in the fund balance and an equal amount against the tax increase.

The Republicans proposed to finance $350,000—placing that amount in the fund balance—and paying the remainder in cash.

Both amendments proposed raising the hourly parking rate at New Roc City from 75 cents to $1. The two sides differed in where the resulting $400,000 in revenue would go. The Democrats want it applied to the offset the tax increase; the Republicans, to the fund balance. The city manager's budget called for no such hourly rate increase.

The Republicans also proposed keeping Hudson Park open Mondays and Tuesdays and restoring some funding to the day laborer site, the cost of which would come out of the fund balance.

Bramson said the differences in the amendments were between a tax rate increase of 2.27 percent or 3.91 percent and a fund balance increase of $350,000 or $703,000.

"In the context of our budget, these are really small differences," he said.

The budget as originally proposed cut 26 full-time positions through attrition, bringing the total number of jobs eliminated over the past two years to 57, or 9 percent of the workforce.

Driving the tax rate increase is a diminishing a shrinking property tax base and large increases in employer pension and health insurance costs. Strome said the amount the state has the city pay into the pension fund has increased from $200,000 in 2002 to close to $10 million for 2011.

The city will be deferring $1.6 million of the increased pension costs by taking out a loan from the state.

Strome said that was not the ideal way to manage city funds, but the alternative would have been an additional 10 to 15 jobs eliminated.