Gallo’s first budget holds line on tax levy

Mayor Shayne Gallo. (Photo by Phyllis McCabe)

Mayor Shayne Gallo has proposed a 2013 city budget that will freeze the property tax levy at its current level while avoiding layoffs or major service cuts. But, for the third year in a row, Kingston’s budget will rely on a hefty withdrawal from the city’s reserve fund, a situation Gallo concedes “is not sustainable.”

Gallo, accompanied by City Comptroller John Tuey, unveiled the proposed budget at a City Hall press conference on Thursday, Oct 18. The plan still needs approval from the Common Council before taking effect next year. Under Gallo’s proposal, the city’s property tax levy will remain unchanged at $15,037,128. Tax rates, meanwhile, will rise slightly, based on a $48 million decline in the city’s total assessed value. According to Gallo, homestead property owners will see an average decrease of about one third of 1 percent in their actual tax bill. Commercial property owners, meanwhile, will see their tax bills rise an average of 0.38 percent.

Gallo’s budget does not include major cuts in personnel or services. In fact, the only cut mentioned in Gallo’s budget address is the proposed elimination of a vacant post for a mechanic in the fire department. Instead, Gallo said, he relied on a “transparent, accountable and modified zero-based budget” while working with department heads. According to Gallo, by asking department heads to justify each line item and cutting costs for things like city-issued cell phones and office supplies, he was able to shave nearly $2 million off the total city budget.

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But, Gallo’s budget also relies on drawing $686,393 from the city’s fund balance. Last year, Gallo blasted his predecessor, former mayor James Sottile, and the Common Council for taking more than a million dollars from the fund balance to push down the tax levy, calling the move “irresponsible” and claiming that it could push up the cost of issuing bonds for important projects. But, Gallo said, he had found himself hamstrung by sharp increases in state-mandated expenses including a projected 6.3 percent increase in payments into the state retirement system and an 8.3 percent increase in employee and retiree health care costs.

Gallo said the biggest factor in his decision to tap the fund balance was a projected increase of more than half a million dollars in the “Safety Net” welfare program. Those costs alone, Gallo said, would have absorbed the entire allowable tax increase under the 2 percent property tax hike cap.

“The alternative would have been to raise taxes by double digits,” said the mayor. “The dynamic has changed because the financial circumstances have changed.”

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