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City Council stalls on budget vote; $5.65M property tax hike is cause.

Byline: Nick Kotsopoulos

WORCESTER - Faced with angry taxpayers and a municipal election looming in the fall, the City Council appears hellbent on eliminating the controversial $5.65 million property tax hike City Manager Michael V. O'Brien has recommended as part of his $548.9 million fiscal 2008 budget.

That became abundantly clear Tuesday night, when the council voted for a second week to postpone its vote on the budget. Because such repeated delays are highly unusual, it underscores the school of thought that few, if any, councilors have an appetite for the kind of property tax increase that is built into the budget.

District 2 Councilor Philip P. Palmieri said adopting a budget with a $5.65 million tax increase is not acceptable to him.

"I can't speak for my colleagues, but I think many feel the same way as I do," Mr. Palmieri said. "We simply can't continue asking our property owners to pay more and more in taxes. It's incumbent upon us to find money in the budget that can be used to offset the tax increase. I want to see that increase brought down to zero. I don't know if that can be achieved, but we're certainly going to try."

Mr. O'Brien's budget calls for raising $5.65 million in property taxes, on top of the $4.8 million in additional taxes that will be raised through the 2.5 percent increase to the city's tax levy that is allowed under state law and the $3.9 million that will come from tax revenue generated from new housing and commercial development during the past year.

In total, $14.4 million in new taxes would be the single biggest property tax increase in the city's history. Mr. O'Brien recommended raising property taxes by $5.65 million so he could close the gap between city revenues and expenditures.

If the council can eliminate the $5.65 million tax hike, it would reduce by about $90, on average, the overall property tax increase that single-family homeowners face next year. The size of the tax increase for three-decker owners, meanwhile, would be lowered by about $105, and the scope of the increase for business property owners would shrink by $478 on average.

While that may be good news for local property owners, someone still has to make up the difference. While just about every councilor has made it clear they have no intention of making further personnel or program cuts beyond what is already called for in Mr. O'Brien's budget, some are looking at generating the needed budgetary savings through municipal retirees and nonunion employees.

Tuesday night, Councilor-at-Large Michael C. Perotto broached the idea of having those people pay a greater share of their health insurance premiums. He contends such actions could free up more than $3 million in the budget, which could be applied against the $5.65 million tax increase.

"We're trying to find ways not to have the $5.6 million tax increase," he said. "Hopefully, we can adopt a budget that has no tax increase beyond the (annual Proposition) 2-1/2 increase and new (construction) growth."

But William McCarthy, a City Council candidate and chairman of the Worcester County Republican Club, questions whether city councilors would still be discussing the budget if this were not an election year. He contends that councilors are feeling the heat from an angry electorate, which is seething over the property taxes they already pay.

"What about next year?" Mr. McCarthy asked. "No one is talking about that. The city's (financial) problem isn't going to go away after the council approves this budget. To me, it looks like (councilors) are more interested in pursuing a one-time political fix rather than looking at the bigger picture, and the election may have something to do with that."

District 3 Councilor Paul P. Clancy Jr. said the key remaining issue with the budget, which the council is expected to vote on Tuesday night, is the $5.65 million tax increase, because without it, the city would not have a balanced budget. Whether it is an election year or not, he said, the issue deserved "supreme discussion."

"We will pass (the manager's) budget; there's no question about that," Mr. Clancy said. "But we have to explore where the $5.65 million is going to come from in the budget if we're going to eliminate that tax increase. We need to be upfront about it. The taxpayers have said very clearly that they already bear enough of the tax burden and they cannot afford much more. That's nothing to scoff at, because many of them are hurting."

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Title Annotation:LOCAL NEWS
Publication:Telegram & Gazette (Worcester, MA)
Date:May 31, 2007
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