LACKAWANNA, N.Y. — After the Lackawanna City Council last week rolled back its plan to increase property taxes more than 23 percent and instead approved a just under 5 percent tax hike, we are learning more about how the Erie County stepped in to help.
Lackawanna Mayor Annette Iafallo told us various public officials at the federal, state, and county levels reached out to assist. Eventually Erie County was able to provide some relief for the small city with under 20,000 in population.
But some observers feel there may be more such situations to come in other local communities.
With the public outcry, Lackawanna government officials were really on the hot seat last Thursday and managed to slash that property tax increase.
Mayor Iafallo, who wanted to avoid any city staffing cuts, told 2 On Your Side's Keelin Berrian in an interview last Friday that "We've taken steps to really still operate. But we're going to cut back and tighten the belt, and also we've been talking for years about an auction on foreclosure of properties ... that's going to happen. We're looking into other sources of revenue."
No other details were given there. Iafallo did say they decided to also reallocate some funding from their capital budget.
Then Erie County government staffers jumped in as the county executive noted in his tweet.
County Executive Mark Poloncarz said, first off, they noticed over $1 million in city money was set aside in the mayor's original budget for work on the move to a newly renovated city hall at a Knights of Columbus building purchased by the city.
"We identified very quickly that they had a plan of going to market for their new city hall," Poloncarz said. "And we said this is probably not the best time to do it, because you'll have over a million dollars in debt service in this fiscal year. And if you wait even six months, you might get better rates on your interest rate for the long run, and then you don't have the debt service in this year."
Then county budget staffers found urban initiative grants earmarked for Lackawanna last year and this year totaling $800,000. Those grants were originally intended for the city to purchase new police cars and other items.
Poloncarz added: "People are like, 'Oh, you gave them new money.' It's like, no, it was money that we already approved that they just didn't have in their budget, so it was easy to adjust that. But I'm always willing to help out others."
Former Erie County Control Board member Ken Kruly told 2 On Your Side that he worries that Lackawanna officials "kicked the can down the road" for perhaps more budget problems next year. He said he feels other communities, again, like the City of Buffalo, may face similar budget issues later this year or next year.
The state comptroller's office said it warned governments such as Lackawanna not to depend on one-shot revenue from federal COVID relief money, and they may do more monitoring more-so in the future.