Staff Writer

ONEONTA — Last year at this time, Eighth Ward Alderman Asa Allison warned that skyrocketing health insurance costs would be a major culprit behind future city tax hikes.

In his presentation Tuesday of the proposed 2003 city budget, which includes a 5.9 percent tax rate increase, Allison made good on that warning.

Sixty-six percent of the increased costs in the general fund, he told aldermen, are attributed to personal services and fringe benefits, which fall under the umbrella of health insurance and wage costs for city employees.

"At some point along the line, something has to be done to stop the increases," said Allison, who serves as the council's Finance Committee chairman. "Next year, there are even going to be more."

The Common Council will hold a budget workshop on the tentative $13,239,078 spending plan at 7 p.m. Tuesday. Aldermen will vote on the budget Dec. 3 following a public hearing.

In the plan, general fund spending is estimated at $9,453,000, which is up $435,892, or 4.83 percent, from the 2002 adopted budget of $9,017,108.

General fund spending is supported by tax dollars, and under the tentative budget, property owners would pay 5.9 percent more in taxes next year.

Health insurance plan increases for city employees are projected to be between 2.7 percent and 23.8 percent, increasing the city's budgeted costs to $1,431,575 — an 18.1 percent increase overall, Allison said.

With this increase, according to the proposed budget, projected health insurance costs will comprise 15.2 percent of the general fund budget.

In his presentation, Allison again warned that if health insurance costs for employees and retirees continue to increase, "it will severely limit the city's ability to provide wage increases, maintain our infrastructure and purchase needed equipment."

Wage increases to full-time and appointed city employees have increased the proposed budget by $156,674, or 1.7 percent of the 2002 budget.

The 2003 budget draft calls for a tax levy of $4,172,053 — an increase $199,386, or 5.46 percent. The property tax rate would be $14.18 per $1,000 of assessed value, an increase of 79 cents or 5.9 percent.

To keep the tax levy down, the Finance Committee cut nearly $385,000 in departmental requests, including police department requests for two patrol cars and smaller ticket items from other departments, Allison said.

The patrol cars could be put back into the budget next year if the need arises, Allison said.

Although next year's capital projects — such as the sidewalk and street replacement program — have not yet been budgeted into the 2003 spending plan, there is $197,000 in state funding already set aside, Allison said.

"I think we gave everybody everything they needed to give citizens of our community the services they need and what they expect," Allison said.

After the presentation, Seventh Ward Alderman Sean Farrell praised Allison and the Finance Committee members for their work in putting together the budget proposal.

"Once again, they have found just the right balance between the needs of the community and the citizens' ability to bear those needs," Farrell said.

Meanwhile, Allison said he would be hard pressed to find any place to trim the spending package.

"I would argue against more cutting," he said. "We can't do any more of that and still keep up the level of services that the community expects."