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NOV 18- NOV 26, 2014

Dyster’s Budget Actually Increases Deficit Council Should Call for Expert Help

By Tom Lizardo

November 18, 2014

Mayor Paul Dyster delivers his proposed 2015 budget which calls for a $4.4 million more in spending.

Tom Lizardo
Former City Administrator,
Niagara Falls

Last week's budget stories in the Niagara Falls Reporter are well done. Sincere congratulations.

There remains only one problem and it is one I've been anticipating since reviewing the 2015 budgetdocuments.

It is inaccurate to say that Mayor Paul Dyster's proposal lays people off to close the structuraldeficit. It is also not accurate to say the tax increase is shrinking the size of the structuraldeficit.


Because the size of the structural deficit is not shrinking in the Mayor's month-plus late budgetproposal.

In fact the size of the structural deficit -- as measured by the amount Dyster proposes to use from thefund balance (the savings the City has for emergencies and special needs) -- is actually growing fromlast year to this year.

The $4.9 million transfer of savings is $500,000 higher than 2014. The Mayors month-plus-late proposalgrows the structural deficit by 11 percent.

Let me say this one more time to be clear -- Mayor Dyster's 2015 budget proposal would grow thestructural deficit by 11 percent.

If you took away the tax hike and layoffs, the structural deficit would have grown by some 50 percent injust the year between 2014 and 2015.

If "addressing" the structural deficit means reducing (or at least stabilizing) it, then this proposaldoes nothing at all - whatsoever - to address the structural issues.

Just as with its lack of timeliness, this budget follows the 2012 "disaster budget" in appropriating $4.9million from fund balance.

As predicted in a study two years ago, without more transparency and a wider and deeper budget-makingprocess, the City would be in no position to face future similar budgets - little did we know it wouldonly take two years to get back here.

It is worth repeating again, regardless of the outcome of the 2015 budget, unless the city entirelyoverhauls its budget process, we will keep facing these terrible problems.

For the sake of pin-point accuracy, please make no mistake, the Mayor's budget, as proposed, does notaddress the structural deficit. The Mayor's budget -- as proposed -- increases the structural deficit by11 percent over the 2014 structural deficit (even assuming and including all position cuts and tax hikesare approved).

Nobody should be saying "he did this to shrink the structural deficit" -- because he actually increasedthe structural deficit in this proposal-- by 11 percent.

The crisis is growing larger as the egos at 745 Main refuse to say "help, we really need some serioushelp."

If the budget is adopted as proposed, the City will likely have a tough battle to stay above junk bondstatus in 2015.

Somehow I don't think the City Council will be calling expert testimony for its budget hearings -- but itis certainly needed.

(For a further explanation of what this writer believes is happening with the city budget, see next story.)

The Niagara Falls City Council will hold a public hearing on the proposed budget. Will they call for some expert advice?






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