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Utica mayor to use voluntary furloughs, early retirements to bridge revenue shortfall in city budget

By Eric Reinhardt (ereinhardt@cnybj.com)

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Utica Mayor Robert Palmieri on Thursday announced several steps he is taking to deal with a projected revenue shortfall in the city’s 2020-21 budget due to a reduction in sales-tax collection during the COVID-19 pandemic. (Adam Rombel / CNYBJ file photo)

UTICA, N.Y. — Voluntary furloughs, an early retirement incentive, and a hiring freeze are among the actions that Utica Mayor Robert Palmieri is taking to help make up the projected revenue shortfall in the city budget for the 2020-21 fiscal year.

In addition, Palmieri will temporarily eliminate more than 80 percent of the city’s part-time employees, per a Thursday news release.

One-fifth of the city’s revenue comes from sales-tax collections, and with the business restrictions during the COVID-19 pandemic, Utica is estimating a 15 percent reduction in sales tax for the 2020-21 fiscal year, Charles (Sonny) Greco, chief of staff for Utica Mayor Robert Palmieri, tells CNYBJ in an email. A 15-percent reduction in sales tax equates to about $2.2 million, he adds.

The City of Utica is estimating its sales-tax shortfall based on information in a recent New York State Association of Counties (NYSAC) publication, according to Greco.

Budget actions

Utica’s mayor is seeking a voluntary furlough for certain full-time positions, an early-retirement incentive program for CSEA union members and non-union employees, and reductions in salary of several part-time employees and non-essential overtime.

Palmieri is also instituting a hiring freeze for all vacant positions, a reduction of spending in daily operations, and a 75-percent decrease in capital purchases of what was originally budgeted before the coronavirus pandemic.

In addition, Palmieri will coordinate with City Comptroller William Morehouse to consider deferring payments of certain 2020 payroll taxes until 2021 and 2022, an option recently approved through the federal stimulus law, the CARES Act.

The city comptroller’s office, in conjunction with the solid-waste authority, extended the deadline for payment of fiscal year 2020-2021 city and solid-waste bills until May 31. Residents have until the end of May to pay those bills without interest or penalty.

Palmieri says Utica has and will continue to do “everything to avoid forced layoffs but recognizes it is not immune to the current economic climate and must be fiscally responsible.”

 

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