Posted at: 01/30/2013 6:18 PM
By: Ray Levato
Could dramatically rising state pension costs force the city of Rochester to raise property taxes? Two major credit rating agencies have given the city of Rochester a top rating. One rates the city an A +, but lurking behind that rating and acknowledged by the rating service are some weaknesses. One is the looming pension crisis facing city hall.
Rochester Mayor Tom Richards did not raise property taxes in last year's city budget. He did raise some fees and used $3 million in city reserve, but with skyrocketing pension costs and a $30 million deficit, could he pull that off two years in a row?
The major reason why the city earned top credit ratings is the fact the Rochester has a big bank account for a rainy day. $60-million in what are called unrestricted reserve funds. But the mayor doesn't want to dip into that piggy bank to pay its state pension bill.
Mayor Tom Richards, City of Rochester, said, “People say we should pay it all now. If we pay it all now that mans we take it out of something else. We rough the city up.”
City pension costs are expected to more than double from $26 million just two years ago to $61 million by 2015.
By roughing up the city, the mayor means laying off police and firefighters and cutting other city services and possibly having to raise taxes. But there is a way out , an offer from Gov. Cuomo to have the city pay a set amount each year that would make up the highs and lows of annual pension costs.
Mayor Richards said, “The governor has proposed a flattening program where we pay a flat amount similar to your utility budget billing or fixed rate for your mortgage. I'm in favor of that.”
News10NBC also put the question to Rochester City Council President Lovely Warren.
News10NBC's Ray Levato said, “How are these pension costs impacting the average city taxpayer and resident?”
Lovely Warren, Rochester City Council President, “Currently we've been able to do a great job at having it not impact anybody. I think council has been very aware of all the city's finances and making sure that we are collecting garbage when we're supposed to. And somebody might say something about snow removal but we're doing everything we can so it does not impact the person on the ground.”
Linda Wilmier, who lives in Charlotte, was at Rochester City Hall to pay part of her property tax bill Wednesday. News10NBC asked her about the possibility of the mayor having to raise taxes to help pay for employee pensions.
Linda Wilmier said, “Well, obviously, my first reaction is not to raise taxes. But on the other hand, if this is what it takes in order to maintain the quality of living in the city, then I guess this is what you have to do.”
Pension costs are expected to level off and then start dropping. It sounds like the mayor has a solid plan. He was in Albany Monday to see if he can get any more help. But is a tax hike in his new budget? News10NBC asked for and got clarification from Rochester City Hall. A spokesman says, “nothing is off the table yet.” With $30,000 median household income in the city, the mayor clearly does not want to raise taxes. but at this point , a tax increase is still on the table.