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City of Utica facing $7 million budget gap, layoffs imminent
UTICA, N.Y. (WKTV) - The City of Utica would have to raise property taxes 40% in order to close a nearly $7 million budget gap. That not being an option, there's only one other place to get that kind of money.
"Unfortunately, there will be layoffs and there'll be more layoffs than we've ever had in the history of Utica, New York," says Mayor Robert Palmieri.
In addition to having to close that nearly $7 million budget gap, a bond rating agency recently downgraded the city's bond rating and gave it a negative outlook, adding to the city's bleak financial picture. The mayor explains how the city's current situation would equate to a household in the same predicament.
"You don't have any savings account and you've used all your mastercards and National Grid is coming here and they want their money for the last year of your heating and electricity. That would be putting it mildly," says Palmieri.
The city's budget director, Peter Fiorillo, says that healthcare costs alone are strangling the city, and making it difficult to adhere to the 2% property tax cap.
"Retirement and medical benefits are so astronomical, they put such a burden on the city, that with those alone, we have trouble staying under the tax cap," Fiorillo said.
The mayor can raise taxes above the recently state mandated 2% property tax cap. The common council would simply have to approve it by a super-majority of six votes. If the mayor were to stick to the cap and raise taxes 2%, that would bring roughly an extra $400,000 in revenue, to close a budget gap of nearly $7 million.
Asked if he would give the city board of Estimate and Apportionment a budget proposal carrying a higher than 2% tax increase on Tuesday, the mayor simply said he would deliver a structurally sound budget that continues to provide the services the people of Utica need.
Once the mayor delivers the budget to the board of E&A, it goes to the common council. That body has until March 20 to make any changes and adopt a final spending plan.