TOWN OF TONAWANDA
2007 TENTATIVE BUDGET FACT SHEET
Ronald H. Moline, Supervisor
· The 2007 tentative budget totals $77,632,599 compared to $75,133,210 in the original 2006 budget, an increase of 3.3% in spending. Under this proposed budget, the 2007 per day cost of town government for the average homeowner living in a home assessed at $50,000 will be $2.93, up 28 cents from the $2.65 per day cost in 2006. This is 69 cents higher than the $2.24 per day cost in 1997, resulting in an average annual increase of 3.1% for each of the last 10 years.
· Even though the 2007 tentative budget provides for 24 fewer full-time employees than the 2006 budget (513 for 2007 as compared to 537 for 2006), spending is up by 3.3% for all funds and special districts. The increase in the budget is due primarily to the rising cost of utilities, gasoline and retirement contributions along with the negotiated wage increases for town employees.
· The largest spending increase is for utilities. The proposed 2007 budget provides $8.6 million for utilities, which represents over 11% of the total budget and an increase of 21.5%, or $1.5 million over last year. In addition, contributions to the New York State retirement systems for town employees will be increasing by $200,000. The proposed 2007 budget provides $5 million for this benefit, which represents over 6% of the total budget. Five years ago, this amount was $500,000.
· Estimated non-property tax revenues for 2007 are $36,907,388 compared to $34,414,753 for 2006, an increase of approximately $2.5 million. The increase is due primarily to increases in water and sewer rates based upon independent studies completed last year and a slight increase projected for sales tax revenues. Beginning in 2007, the County of Erie will begin to share with other local governments a portion of the 1% additional sales tax that they have been collecting for years without any sharing. The town’s expected share will be $500,000.
· Although the $2.5 million increase in spending is offset by the $2.5 million increase in estimated non-property tax revenues, it is necessary to increase the tax levy by 9.9% because less fund balance is available to use as a financing source for the 2007 budget. The 2007 tax levy, the amount of money needed to be raised by property taxes, is $37,725,211 compared to $34,318,457 for 2006, an increase of $3,406,754. As mentioned in the last five annual budget messages, fund balance has been used to reduce the impact of rising health insurance costs and retirement contributions for employees and to offset the impact of reduced assessments for NRG Huntley, Indeck, Niagara Mohawk Power Corporation and special franchises that are set by New York State, but these funds are no longer available at the same level. Since 2001, the annual cost for health insurance has risen from $4.3 million to over $8 million per year. The annual cost for retirement contributions has risen from $500,000 to over $4.5 million per year. And the revenue loss from the property tax settlements with NRG Huntley, Indeck and Niagara Mohawk Power Corporation totals more than $4.6 million over the last five years.
· This budget decreases the appropriated fund balance used in the 2007 tentative budget from the 2006 level of $6,400,000 to $3,000,000. Fund balance will be used to provide financial resources to help pay our bills and our employees for the first six weeks of 2007 until our real property taxes are collected in mid-February, so it is important to maintain this source of revenue.
Although this budget process has been particularly challenging, the proposed 2007 town budget, with the cooperation of our department heads and employees, will maintain our reputation of providing the highest quality of service at the lowest possible cost as we continue to look for additional ways to become more efficient.
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