News Release - Mayor Calls for Reform While Releasing Budget Proposal

(Friday, May 14, 2010) – Mayor Robert J. Duffy released a proposed fiscal year 2010-2011 operating budget today that closes a $43.9 million shortfall while exposing systemic failures in state and local governments that threaten economic calamity unless comprehensive reforms are enacted soon.

“The City and the State are sailing in unchartered waters and we cannot continue to operate with a ‘business as usual’ attitude,” Mayor Duffy said at a news conference Friday, as he unveiled the budget that reduces spending by 3.1 percent. The $465 million plan would direct City spending from July 1 to June 30, 2011. “We need to change the status quo – if we do not, we will be bankrupt. We will end up under a financial control board. Not to advocate for change would be wrong and irresponsible.”

The budget proposal now goes to the Rochester City Council for consideration, potential amendment and final approval by June 15. The proposal is titled “A City and State on the Brink,” and would close the largest budget gap in the Rochester’s history without raising homeowners’ property taxes or cutting vital services.

The largest planks in the funding bridge to cross the $43.9 million gap were constructed from efficiencies and some service cuts; a $12 million withdrawal from the City’s Reserve Fund, or savings account; and $6 million in revenues from such things as increases to the refuse and water fees. Almost $11 million of the shortfall was closed through a variety of methods that reflect the thorough level of scrutiny by the managers of every City department.

“Nothing we do was taken for granted,” Mayor Duffy said. “Every service provided by the City was thoroughly examined to determine if it added value and was worth the expenditure of the taxpayers’ hard earned dollars.”

Recognizing that the average city household has an income of just $29,000, Mayor Duffy’s budget provides a slight decrease in homeowners’ property taxes. The homeowners’ property tax rate would be cut by six-tenths of one percent, resulting in a $7.40 reduction in a typical homeowner’s tax bill. Unfortunately due to state tax shifts and mandates, business taxes would rise 1.4 percent, or $149.40 a year for the typical business.

A total of 39 full-time positions would be cut from the City’s workforce, while many other workers would be re-assigned as a result of broad changes to government operations.

All branch libraries would remain open and some hours will extended. Recreation Centers would enact an outreach effort to bring their services to more city children. No firehouses will be closed and the Rochester Police Department will preserve the historic gains made to the size of its force in recent years to continue reducing crime.

The development of a marina at the Port of Rochester remains on schedule, quadrant teams in the Department of Neighborhood and Business Development are moving forward with focused investments in city neighborhoods; and City investments in downtown are leveraging millions of private-sector dollars, driving Center City development at a pace not seen in 50 years.

But Mayor Duffy warned that this is the last year that his administration would be able to present a balanced budget without significant tax increases or service cuts if the City is forced to continue operating under the same fiscal constraints that currently dictate the vast majority of its spending. Left unchecked, these mandates will stymie investment gains and drive residents away from the region.

Mayor Duffy also renewed his call for a change in Rochester City School governance. In response to lawmakers who have suggested a referendum be held on this issue, the mayor suggested citizens be given a chance to directly vote on the state mandates.

“We are losing our ability to govern our financial future due to state mandates. Next year, we will not be able to cut any deeper,” he said. “New York State must reform the way cities are able to manage themselves if we want to avoid the inevitable.”

He pointed to the budget proposals offered by the mayors of other cities across New York as examples of municipalities reaching the financial breaking point.
• New York City is closing 20 fire companies, eliminating 11,000 jobs through layoffs and attrition and closing 50 senior centers and raising their sales tax.
• Yonkers is raising its property tax rate by 4 percent -- an average increase of $295 per homeowner; eliminating 91 police officers and 44 firefighters; and cancelling all non-revenue producing parks and recreation programs.
• Syracuse is increasing its property taxes by 5.5 percent to raise $6 million; eliminating 34 police officers and 20 firefighter positions.
• Buffalo is doing away with 43 police officers.
• Binghamton is raising property its property tax rate by 8 percent and eliminating 10 percent of its workforce, including 12 police officers

As examples of issues requiring reform, the mayor cited a State Pension System that is fast becoming one of the City’s largest annual expenses; a state Maintenance of Effort law that directs almost three-fourths of the City’s tax collections to the School District without giving taxpayers a voice in how that money is spent; and an arbitrator’s ruling that requires the Police Chief to pay police officers overtime wages for functions that can be performed at a straight salary.

Mayor Duffy suggested a range of actions to eliminate these financial malignancies, including examining binding arbitration, the Triborough Amendment and the Taylor Law to help cities maintain financial stability and at the same time respect the contributions of their workforces.
“I know these are dramatic steps with statewide implications, but now is the time to step up and act responsibly,” Mayor Duffy said. “We are in the fight of our fiscal lives here and we need measures like these enacted, now.”


News Media: For more information, contact Gary Walker at 428-7405.