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"The situation that we're in, while similar across the state, we cannot tax our way out of this situation," he said at the City Council meeting Thursday. "This is a possible component of the solution."

Giannettino noted that other municipalities in New York have exceeded the state-imposed property tax cap that limits tax levy increases to 2% or the rate of inflation, whichever is less. The village of Fredonia in Chautauqua County by 65%. Other cities, including Buffalo, Olean and Watertown, have either proposed or adopted budgets that exceed the tax cap.

Auburn City Councilor Christina Calarco inquired about the intent of the tax cap and whether it was linked to the Aid and Incentives for Municipalities program, the source of unrestricted state aid for cities, towns and villages. Auburn City Clerk Chuck Mason explained that AIM came first — it was adopted under former Gov. George Pataki — and the goal was to reward municipalities with higher aid increases if they limited property tax hikes.

But the state did not follow through on that promise. During the Great Recession, the state actually slashed aid to municipalities. The aid levels have been flat for more than a decade, with Auburn receiving nearly $5 million a year.

Gov. Kathy Hochul's proposed budget would not change the aid levels, but does include the temporary assistance Auburn and other municipalities received last year. The city received more than $578,000.

Mason told the City Council that AIM is "another New York state policy that really needs to be evaluated."

"This just puts the squeeze on the municipalities to do much, much more with much, much less," he said.

The City Council voted 5 to 0 to schedule the public hearing for exceeding the tax cap. The hearing will be held at the May 22 council meeting.

Earlier in the meeting, councilors provided feedback on the city's proposed budget. Councilor Terry Cuddy mentioned developing a sustainable financial plan — a suggestion that was offered by a resident during the public to be heard portion of the meeting. Councilor Rhoda Overstreet-Wilson sought more information about the grants that the city receives to make certain purchases. 

Giannettino floated several ideas to address the city's short-term and long-term budget situation. He wants to explore health insurance for retirees, especially those who are eligible for Medicare, to determine if there are opportunities to save money. He also requested a breakdown of the line items in the budget.

Giannettino urged city staff to develop a plan that would reduce utility budgets by 10%. Among the changes he suggested is turning the lights off at the New York State Equal Rights Heritage Center, which is operated by the city.

He also wants more oversight of overtime spending. Under his proposal, most of the overtime budgets would stay within departments. But 30% would be put into a separate fund in the city manager's office that would be scrutinized, he said.

"I think we're at that point where we really have to justify every expense," Giannettino said. "I know there's been cuts. I've seen that and we appreciate that. But we're at a point where we're talking raising property taxes, possibly exceeding a tax cap. We're talking potential cuts, not just expenditures but now we're talking positions. 

"I think that we owe it to the people of Auburn, but also the employees of this organization to put in that extra time."

The City Council will hold a public hearing on the budget proposal at its May 22 meeting. It is expected to adopt the budget on June 12. The new fiscal year begins July 1.