CHRIS’S CORNER: It’s Worse Than It Looks

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By: Chris Voccio

Niagara Falls City Councilman

Depending on when you read this, online or in print, the City Council may or may not have voted on a garbage collection user fee, and the mayor may or may not have presented his 2020 budget.

First let me say that I’m a positive person. I see the good in things and people, and I remain bullish on the future of Niagara Falls. This column’s headline is merely a realistic portrayal of the situation we’re in concerning the city’s budget deficit.

It has been reported that the city needs a garbage fee because we have a four million dollar deficit, and if we don’t enact the user fee we’ll need to lay-off sixty-plus city workers. And garbage collection happens to cost around $4 million.

I wish it were that simple.

The budget deficit is dramatically larger than $4 million dollars. (As I write this, I haven’t yet seen the mayor’s proposed budget so I can’t give you specific numbers.)

Complicating the discussion is that there are known cost escalations for next year that have nothing to do with garbage. We know that health insurance for city employees and retirees will cost much more than anticipated (about $20 million total) and an anomaly of accounting rules results in the city (and probably many employers) having an extra payroll period in 2020.

In other words, the garbage fee could just as well be called a “public employee health insurance escalation fee”, and the $4 million it generates won’t come close to closing the budget deficit.

Because of the dispute between the State of New York and the Seneca Nation of Indians, the 2019 deficit was filled with a promise of funds from the governor. This deficit continues into 2020, worsened by the health insurance and payroll accounting anomaly mentioned above as well as other cost increases.

Without seeing the mayor’s proposed budget as I write this, I’m guessing our 2020 budget deficit will be around $15 million. If the garbage fee passes, that gets it down to around $11 million. If a tax increase accompanies the garbage fee, we still could have close to a $10 million deficit. If the governor gives another gift (it’s hard to determine if these monies are a loan against future casino revenues or an outright grant) that will close the gap. All without a single city employee making a sacrifice to reduce government costs.

But if we want to use those casino revenues, should they come, for economic development and infrastructure instead of plugging holes in the city budget, we still have this huge gaping deficit. We only get out of this mess by reducing the size and scope of government.

More efficient management of what we currently have could possibly help lower expenses, but this large of a deficit can only be eclipsed by a restructuring of government services.

All of this leads to the fact that the threat of 60+ layoffs doesn’t solve the problem. The number needs to be much larger if we truly want to balance our budget (live within our means) and use any future casino revenues for economic development and infrastructure, other than a small amount we could dedicate to services directly related to the casino.

For those of you concerned about losing government services, and for city employees concerned about your jobs, there is another way. A better way.

If the municipal employee unions wanted to help restructure the cost of government, things like health insurance expenses and work rules that inhibit efficiency and drive up overtime expenses, then we may be able to get out of this mess with reduced job reductions. This, along with aligning our service delivery with other local government entities, could get us out of the deep hole we’re in.

If the union leaders step forward in an effort to help save the city, if they voluntarily accept meaningful sacrifice, we can get through this. But the city has nothing to offer in return. We simply can’t afford to trade sacrifices for promises of gifts in the future. If that casino spigot turns on, we simply can’t use it as payback to the unions. We need to start using those monies to rebuild our city.

The other alternative that could solve our problems is the nuclear option. Google “Chapter 9” for details.

But don’t let anyone fool you. We don’t get out of this hole without serious sacrifice. The question is, who does the sacrificing?

 

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