'Modest' tax increase could be coming to Lackawanna
Mar 18, 2025
BUFFALO, N.Y. (WIVB) — A "modest" tax increase could be coming to the city of Lackawanna as costs go up across the city, mayor Annette Iafallo said Tuesday in her annual State of the City address.
Iafallo cited a 45% increase in annual premium costs for contractually obligated employee health i
nsurance as well as increased costs for snow removal supplies and the rising cost of hiring city employees as the reasons for a potential increase.
"Inflation and supply chain issues are affecting every level of government," Iafallo said. "Federal aid such as FEMA reimbursements for winter storm costs or American Rescue Plan dollars is no longer available. There is a new financial reality all municipalities, including Lackawanna, must prepare for."
Iafallo said that the city has a goal of reducing operating expenses by 10% in the 2025-26 fiscal year, while maintaining current service levels. The city has not yet approved a budget for the next fiscal year, but will be working in the coming months to get a budget sorted out.
Tuesday's remarks were delivered virtually with no members of the media allowed inside. Iafallo, who has served as the city's mayor since January 2020, did not take questions following her 25-minute address.
The city has raised taxes in recent years. Last year, a 23% tax hike was originally proposed, but it ended up being lowered by the city council.
The potential tax hikes come as the city looks to complete a number of projects, including the construction of the new city hall at the former Knights of Columbus site on South Park Avenue and creating a project plan and budget for the destruction of the "orange building," which sits on stilts on Ridge Road, a 1960s city hall extension. Housing located on several vacant lots that are city-owned is also in the works.
The costs for the project is estimated at $18.5 million. It is the largest city-led development project in the city's history.
Iafallo did tout her "open for business" strategy that she implemented upon taking office, saying that the combined total assessed value of city properties has gone up by $8 million since then, bringing the value up to $780 million. However, it only represents a 1% increase.
The business additions of Sucro Sourcing on Hamburg Turnpike, Flexlume Sign on Albright Court, Buffalo Felt and a new Taco Bell, both on Abbott Road, were cited as signs of increased economic development. Iafallo added that several new projects are in the works, including a One Federal Credit Union branch and the addition of a Deckorators plant, a decking company.
She also pointed out the use of the total fund balance decreasing by around $3 million, saying it represents money allocated to complete around a dozen public works, public safety and recreational projects.
Iafallo admitted the city is facing challenges, but said she will work to try to make things easier.
"Without question, we are all feeling the impact of inflation," she said. "We're feeling them every day managing Lackawanna city government."
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‘Modest’ tax increase could be coming to Lackawanna
Aidan Joly joined the News 4 staff in 2022. He is a graduate of Canisius College. You can see more of his work here.
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