NILES - City Council unanimously approved the 2013 budget proposal Wednesday night at the regular monthly meeting.
Appropriations showed the budget was cut by $249,600 compared to 2012. Councilman Stephen Papalas said the cuts are not overwhelming and the budget has undergone cuts over the course of the last six years.
"Every year, we cut it more and more," Papalas said during the meeting. "Now, I'm afraid for various reasons that we simply cannot cut it anymore."
According to Papalas, Niles needs revenue increases or the next step may be personnel cuts.
"We might have to cut into personnel and certainly would have to do away with a lot of the equipment that we are using with cruisers and so on," he said. "Every policeman gets to take a cruiser home, which is great. I think it is a wonderful idea, but if we can't afford the insurance, the upkeep, or additional cruisers, what are we going to do?"
Mayor Ralph Infante agreed the situation has come to a head.
"I've made every cut I could possibly make right now except personnel. If it gets to 2014 and we can't raise any revenue, we are going to have to look at starting to lay off," Infante said. "We're going to be wide open with everything and show everybody the issues at play."
Numbers provided to the Tribune Chronicle show a dramatic decrease in the city's year-end bank balances over the course of the last six years. At the end of 2007, the city had a balance of $34,283,200. That number is expected to be down to about $8 million at the end of this year.
Infante cited several issues as contributing to the steady fall in funds, including falling interest rates and a drop in income tax revenue.
"If you add it up over four years, we are down about $6 million in interest alone compared to 2007 that we would have used to subsidize our budget in order to keep the police and fire and general fund operating. Those rates are down to nothing now," Infante said. "It is time that we make a move."
Papalas said a raise in the income tax rate may be required to get the revenue back to where it needs to be.
"We need to sit down and find a way to raise additional funds," he said. "Due to this impacting the police and fire most directly because they have the two biggest budgets, we want to sit down with them and see what ideas they might have. But, ultimately, my view is we're going to have to ask them to help us show the community that we would spend any additional revenue in a way that they would agree with and support."
According to Papalas, the city went through a similar financial crisis in the 1980s.
"Our city was taken over by the state, because we were insolvent. We had to go through that for years. We had a special commission and they had to give us special permission any time we had to spend money, even if it was for tires for the police cruisers. Every Saturday morning we had a meeting with these people in the city building and they put these charts up on the wall. We couldn't patch potholes.
"I never want to go back to that. One of the ways we got out of debt was by passing a safety levy, increasing the income tax that way. We will go house-to-house with policemen and firemen and explain the situation to them if we need to. Whatever it takes, we are willing to do."