Erie County Executive Joel A. Giambra intends to cut county property taxes by 12 percent next year because of the massive 1999 county surplus -- $85 million. If he is successful, that would mean a 30 percent drop in the county taxes in two years.
No part of the surplus money, he said, will be used for various large projects facing the county -- including a convention center.
"It's D-day for the taxpayers of Erie County," Giambra said. "Dividend day."
The county cut taxes by 18 percent this year in a budget proposed by Giambra's predecessor, Dennis T. Gorski, and then revised by the Democratic-controlled County Legislature. Republicans, however, note that Gorski and the Democrats had been reluctant to cut county taxes until Giambra made it a campaign issue.
Top county Democrats, led by Legislature Chairman Charles M. Swanick, are now taking a close look at Giambra's latest proposal and said they will consider taking the matter to court. The Democrats' goal, Swanick said, is "significant" tax-cutting, a goal he said is possible without extensive restructuring of government or spending cuts.
Swanick, who attributed the large 1999 surplus to a good statewide economy and wise fiscal management under Gorski, said Democrats would have no proposal on a 2001 tax cut until fall, when the budget is due to be presented.
Other pressures also are being brought on how to use the surplus after word got out last week about its size.
Mayor Anthony M. Masiello and the Buffalo Teachers Federation, which recently agreed to a settlement for a decade-old teachers pact that courts said the district must honor, have contacted Giambra administration officials.
But for now, Giambra plans to use the $85 million on projected gaps in the 2001 budget and cutting taxes. The plan meshes with an announcement last week by County Comptroller Nancy A. Naples and Budget Director Joseph Passafiume that most of the surplus --
nearly $70 million -- has been designated as a special fund to fill gaps in next year's budget. The Giambra administration is projecting the budget at $1.01 billion -- lower than this year's. The budget is supposed to be filed in November.
Giambra said "aggressive" spending cuts in key areas will make the 12 percent tax cut possible even after the budget gaps are filled.
"We are not cutting programs to fund these cuts. No services will be cut," he said. "We're just cutting the fat."
County Democrats said there's no fat to cut.
"We will not accept any criticisms of the 2000 budget. There is no structural deficit in the budget," said Swanick. "It is as solid as the day is long."
Under Giambra's plan, spending cuts in 2001 would include the elimination of $17 million in special projects set aside by the Legislature, plus $6.4 million in cuts to various social services programs. The county's debt payments will be down by $3.3 million next year, also making the tax cut possible, he said.
Naples, a Republican, endorses Giambra's plan.
"It's fiscally sound," she said. "We're not causing any risks, and we're achieving the goal of a tax cut. In a billion-dollar budget, we should be able to make some cuts."
But the fact that Giambra has plans for the surplus doesn't mean the county's extra cash isn't arousing envy in other quarters.
Already, others have their hands out.
Naples has fielded requests for money by the Buffalo Teachers Federation, and Giambra took a similar phone call from Masiello bright and early Friday morning -- just hours after the surplus figure was unveiled.
"Tony, it's not all surplus," Giambra told the mayor during their brief phone conversation. "I have to plug the hole first."
The Giambra administration said the plan will work this way in 2001:
The $85 million in surplus money will be put into two funds, one of nearly $70 million to fill gaps in the 2001 budget and one of about $15 million to pay off county debt in coming years.
The budget gaps are administration estimates based on certain portions of the county's current budget that were funded by one-time "windfall" revenues that will dry up in 2001, budget officials said.
At the same time, some $26.7 million in total spending cuts will free up money to make the 12 percent cut in the tax levy possible, budget officials said.
Giambra said his plan is responsible and will maintain reasonable reserves in the county budget. The plan also will help the county stop a pattern that had gone on in recent years of raising taxes and then padding the budget, he said.
"We're going to accurately project expenditures and revenues. We're not going to ridiculously pad the budget," Giambra said.
Passafiume, the budget director, said that by 2002 the budget gaps will be eliminated and the practice of rolling over one-time "windfall" revenues will be stopped. State and federal mandates on some social services programs make elimination of the entire problem impossible in just one year, he said.
Naples said the larger-than-expected surplus is party due to excess revenues in 1999 and partly the result of a pattern of overbudgeting in Social Services and other departments in recent years.
Unanticipated extra money also was located in certain reserve and liability accounts that had swelled to high levels during the Gorski administration, she said.