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FUND BALANCE EYED TO AVOID TAX HIKE

Several legislators demanded Monday that Niagara County spend from its resurgent fund balance instead of raising property taxes.

At the Legislature's first full-membership budget work session, Budget Director Daniel R. Huntington said the county, which had exhausted its surplus two years ago, now has $14.9 million in the bank.

County Manager Gregory D. Lewis proposed a 9 percent property tax increase and the elimination of 49 jobs, only 10 of which are now filled. He proposed spending $1.5 million of the surplus, specifically to offset the annual increase in Medicaid.

In order to reduce the tax increase, the county would have to spend more surplus money than that.

"I will not support a 9 percent tax increase knowing we're sitting on that kind of money," said Legislator Danny W. Sklarski, D-Town of Niagara. He said the tax rate will be reduced 1 percent for every $661,000 spent from surplus.

"Nine percent is not going to cut it. You cannot possibly begin to justify that to the people of this county," said Legislator Glenn S. Aronow, R-Lockport.

Majority Leader Malcolm A. Needler, R-North Tonawanda, suggested doubling the spending from the surplus to $3 million.

The only restraint on that is a resolution the Legislature passed two years ago, barring itself from spending any surplus until the total in the bank exceeded 6 percent of spending and then allowing the spending of the amount above the 6 percent threshold.

Huntington said the surplus exceeds the 6 percent threshold by $1.8 million, so under current policy, that's the most that can be spent. But that policy could be changed anytime.

Lewis warned that the surplus should be kept in case of "a major catastrophe," but the Legislature seemed to regard the 9 percent tax hike as a more immediate threat.

Huntington said the county built up a fund balance quickly because of two major factors.

When the county raised its sales tax by 1 percentage point last year, it budgeted for only six months of revenue, but the increase took effect three months sooner than expected. The result was an extra $6.8 million in revenue.

Also, Huntington said the county budgeted last year to cover a $5.5 million operating deficit from prior years. The deficit was actually only $2.8 million, sending $2.7 million to the surplus.

Lewis said his proposed budget includes $1.3 million in room for restoring cuts and settling union contracts now under negotiation without raising property taxes more than 9 percent.

The Legislature started dipping into that by rejecting Lewis' recommendation to eliminate a program that assigns drug felons to treatment instead of jail.

The Legislature voted, 14-2, to restore the $149,000 Treatment Alternatives to Street Crime program.

The suggestion that it be eliminated also had been made in previous years. But as in the past, the lawmakers were convinced it saves money by keeping people out of jail.

"It's a hardball program," said Probation Director Ronald Stanish.

The Legislature will continue discussing the budget at 6 p.m. today.

e-mail: tprohaska@buffnews.com

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