NIAGARA FALLS, N.Y. - Residents and city employees watched Wednesday evening as Niagara Falls City Council members went through a laundry list of cutting and adding money to different city departments for the proposed 2013 budget.

"We created a budget that creates a zero tax increase, creates a reserve account of approximately $750,000 and restores most of the positions back into the budget," said Sam Fruscione, the city council chairman.

The council calls for a zero percent property tax increase. Niagara Falls Mayor Paul Dyster proposed an 8.3 percent tax increase earlier this month.

The council's proposed budget would also keep most seasonal and part time workers cut by Dyster's so-called "disaster budget."

"His original proposal includes tax increases, unemployment, houses for sale, foreclosures, doom and gloom," said Fruscione.

The council's major cut includes eliminating more than $3 million to USA Niagara Development Corporation.

"That money's going to come back to the City of Niagara Falls. It's going to come back to the residents and business owners," said Fruscione.

Mayor Dyster disagreed.

"I think this action is short-sighted," he said.

Though council members said the state will now step up and invest in the city, Dyster said cutting funding to the corporation will slow down development.

"The demolition of the winter garden, restoration of Old Falls Street, all the programming that's happened down there has been led by either USA Development Corporation or they've been a very strong partner," said Dyster.

The mayor can choose to veto the council's proposed budget. Dyster and the council will have to come to an agreement on a 2013 Budget by Dec. 15.