NIAGARA FALLS — Mayor Vince Anello’s State of the City address Tuesday included a promise that property taxes would remain steady for three years — 2007 to 2009 — because of an increase in state financial aid. “Contrary to what some people may think or say, the state of the city is strong,” Anello told about 120 people in Earl W. Brydges Library. “To borrow from Mark Twain: Rumors about the demise of Niagara Falls have been greatly exaggerated.”

City Controller Maria Brown said a three-year financial plan for 2007 to 2009 calls for the city to use a portion of its $5.7 million designated fund balance in state aid to avoid a property tax increase.

“This isn’t smoke and mirrors, because the state has reviewed our plan,” Anello said.

The plan includes this year’s tax rate, which provided a 4.4 percent decrease to homeowners and a 3.3 percent increase for nonresidential property owners. The city has been nearing its state constitutional tax limit for several years, but Anello said rates will remain steady for both homestead and nonhomestead property taxpayers for the next two years.

That’s possible because the city received more state aid than was expected in 2005 and 2006, according to Brown, and the $5.7 million fund
balance is restricted under the state’s new Aid and Incentives for Municipalities Program for giving tax relief to property owners. She estimates it will take about one-fifth of that balance to keep tax rates steady as costs for the city rise.

The mayor, who is running for re-election this year, also reported Tuesday that the city’s unrestricted fund balance was $2.5 million at the end of 2006, which is more than double last year’s year-end fund balance of $1 million. Lawmakers use this fund for emergencies or to plug shortfalls and have spent $250,000 so far this year.

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