Budget battle heats up in Schenectady

Posted at: 09/11/2012 8:28 AM | Updated at: 09/11/2012 9:59 AM
By: Dan Bazile

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SCHENECTADY -- Residents raised their voices in objection as Schenectady city officials sorted out a decision to vote for a new sales tax revenue agreement with the county. They came back after a brief recess to approve the measure that some say is unfair to the Electric City.

Sales tax is collected countywide in Schenectady. The city has been getting about $11 million dollars since 1998. But the county's portion of that revenue has grown significantly, The council agreed to extend the deal for eight more years.

"The new proposal would be, for a city our size, the worst sales tax agreement in the state. This proposal would be an albatross around the city's neck for the better part of a decade," said Schenectady city budget analyst Jason Cuthbert.

Cuthbert went against his boss, Mayor Gary McCarthy, putting his job on the line to voice his opposition. He said the city is entitled to a bigger share. Cuthbert said the increase would come at a time when the city desperately needs it. The mayor and council members have been doing everything possible to close a budget deficit estimated at around $5 million. City jobs and services are on the chopping block.

"To vote for the sales tax deal in front of you is to vote for higher city taxes, for reducing and eliminating city services, for laying off dozens of city employees," Cuthbert said

"We're not going to solve all the city's problems with this one agreement. We have issues of property tax collection," said McCarthy.

The mayor said this is the best deal Schenectady could get and that the new agreement has built-in growth. He said Cuthbert's analysis is not correct because more money simply does not exist.

"His fact pattern is overly simplistic and makes assumptions in a very narrow positive manner," McCarthy said.

The city will continue to look for ways to cut costs or find revenue to balance the books. Some ideas include selling homes taken from foreclosure and better collection of property taxes.