Olean committee votes to break 2% tax cap, debates sales-tax projection and a proposed 6% tax hike

The Olean Finance Committee on April 1 voted to place a local law to break the city—s 2% tax-cap limit on the agenda and to hold a public hearing alongside the finance meeting, moving the matter toward a council vote.

Alderman Levy moved the motion to break the 2% cap and it was seconded; the committee recorded the vote as "Aye." The item will go on the Tuesday agenda with a public hearing, the committee said.

Committee members also discussed the mayor—s budget presentation showing personnel and benefits now account for roughly three-quarters of the general fund budget and the finance staff—s recommendation that the city may need either to raise taxes or restructure personnel levels to maintain sustainable reserves. The mayor (presenting budget context) warned that continued years of 0–1% rate changes while expenses rose has left the city—s revenue growth lagging inflation and costs.

Sales-tax projections were a focal point. Finance staff reported a 12-month actuals approach yields a practical projection of about $5.3 million (using April 2024–March 2025) versus prior budget assumptions of roughly $6.0 million; the committee discussed whether to set a policy floor at 90% of prior-year sales tax (previously proposed) or a smaller reduction. One member recommended using the 12-month actuals and moving future modeling to 98% rather than the 90% figure; the committee directed staff to revise the related resolution and put any modified policy into effect June 1 to give time for modeling.

Why it matters: the tax-cap motion and sales-tax projection together determine how much property-tax revenue the city can include in its fiscal model and directly affect the scale of budget cuts or tax increases the council will consider.

Committee members asked aldermen to submit follow-up questions to the mayor and staff so the council can finalize the budget and vote by the scheduled date in April.