CITY OF NEWBURGH – Newburgh’s City Council approved on Monday a $47.8 million budget for next year in which taxes will rise for residential and commercial properties, but at a smaller amount than in City Manager Michael Ciaravino’s initial proposal.

Taxes for residential properties will increase by $15.73 for a house assessed at $150,000 and by $57.14 for a commercial property assessed at the same amount.

Ciaravino’s initial draft, released last month, called for a 7.1 percent tax levy increase.

Under that increase, homeowners would have paid an estimated $75 in additional taxes a year, and commercial property owners an additional $278.

The levy approved on Monday is $1,000 under the state’s 2 percent cap and $755,824 smaller than the original levy.

“I’m really, really happy that we’re at this point,” Mayor Torrance Harvey said.

Charles Duffy, a consultant hired to shepherd Newburgh’s budget to completion after the city’s former comptroller resigned in September, worked with the administration and Council to amend expenses and revenues to reduce the initial increase.

The budget relies on $885,000 in reserve funds, police department overtime savings of $113,348 and a significantly higher forecast for sales tax revenue.

The budget includes $11,050,000 in sales tax revenue, a 10.5 percent increase.

“The sales tax, we did take a more aggressive stance,” Duffy said.

Newburgh’s Council also approved changes in response to a state comptroller’s audit that said the city underestimated expenses by $5.1 million.

State auditors, who review Newburgh’s budget as a condition of a 2011 bailout, recommended that overtime spending by police and fire increased by $830,000 and pension costs by $576,193.

The state also said that Newburgh’s general fund budget expenses omitted $841,622 in scheduled debt repayment and that the city should add $2,275,000 to account for uncollected taxes next year and increase its contingency fund to $900,000 from $250,000.

The final budget incorporates $2.2 million of those recommendations.

The Council also voted to increase the share of the overall levy drawn from residential properties. Commercial properties are much fewer in number, and are taxed at a significantly higher rate.

Councilwoman Patty Sofokles owns a home and a business in Newburgh.

“I get it both ways, but it’s not a lot,” she said. “We’re not talking hundreds and hundreds and hundreds and hundreds of dollars.”

lsparks@th-record.com