NIAGARA FALLS, N.Y. - The Niagara Falls City Council has tossed out a controversial garbage fee, as it continues its review of Mayor Paul Dyster's proposed budget for the coming year.
But that also means a proposed tax cut has been kicked to the curb.
When unveiling his budget in September, Dyster said the garbage fee was a more equitable way to generate revenue for the cash strapped city, which is still not getting any casino funds due to a dispute between the New York State and the Seneca Nation of Indians.
But lawmakers who got an earful from residents angry about the new $168 annual fee, have reached a compromise with the mayor to eliminate it for now.
That is not to say that Dyster no longer believes the garbage fee was a prudent idea.
“We have had some institutions in our city who have never paid anything for city services, but are still users of solid waste services," said Dyster, referring to tax exempt properties including churches. “This way, they would have had paid something at least."
Dyster also noted that the city is getting close its constitutional limit on what it can raise through property taxes.
“And at some point and some way, we are going to have to find a way of backing off of that. So the user fee would have helped with that,” Dyster said.
However, with the new garbage fee off the table, so too is Dyster’s proposed property tax cut, which would have lowered the tax rate by 13% for residential property owners and 3% for commercial properties.
Instead, to make up the estimated $3.1 million in annual revenue lost by the elimination of the garbage fee, residential property owners will see an increase in their tax rate of less than 1%, and commercial property owners will see theirs rise slightly higher than that.
“It’ll be about the same amount of money for the city in the end,” said Niagara Falls City Councilman Kenny Tompkins, who was among those pushing for the elimination of the garbage fee.
“One thing about a user fee is you can’t deduct that from your taxes,” said Tompkins. “Another is that property taxes can be controlled by cap limits…but with a fee you can set it one year and then the next just double it. People were afraid it would become an uncontrolled revenue generator. There’s no trust in our city government by the people and I don't blame them for that.”
“I still think there are some advantages to going to a user fee,” said Dyster. “But I also understand the sensitivity that City Council had about imposing what amounts to a new tax…even if proposing a new tax means you can cut an old tax very substantially."
Still, Dyster said because he was not “wedded” to the garbage fee, he felt the need to work with lawmakers on a compromise.
“This is why we have a City Council to make these types of decisions,” said Dyster. “We're happy we were able to convince the council to fund moderate increases, from whatever source, because it allows us to continue essential services."
But Tompkins says the city council will now look to find further savings, which could impact some of those services and lead some job cuts.
Lawmakers have until the middle of next month to adopt a budget.