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The administration of County Executive Joel A. Giambra warned 3,000 county employees Friday that they might be laid off; meanwhile, some lawmakers wrangling with the mess over next year's budget said they want to hear more about a sales tax increase.

Insisting the county can't make ends meet without ratcheting up the sales tax, Giambra has submitted a budget that would eliminate a wide array of services and idle 3,000 employees, most holding jobs not mandated by the state or federal government.

The "scorched earth" budget was intended to rouse a public willingness to let the sales tax in the county rise by 1 percentage point, to 9.25 percent, on transactions as of March 1. It would generate $109 million next year and $125 million each year after that.

Giambra calls his "Medicaid penny" temporary, saying it would remain in effect only until officials fix the government health care program straining counties around the state. Unions representing public employees, whose leaders have criticized Giambra's tactics and budget, remain crucial players in the attempt to sway the state.

County department heads and their aides circulated the warning letters after lunch Friday. Some went in mail slots. Some were handed to employees.

"Unfortunately," the letter said, "as a result of the failure of New York State to implement Medicaid reform or approve the 'Medicaid penny,' your job would be eliminated effective Dec. 31." The letter discussed workers' options for continuing health insurance and the benefits available to those choosing to retire.

"We understand that these are difficult times," the letter said. "Please take this time to carefully consider personal financial arrangements in areas such as health insurance, retirement loans, payroll-deducted insurance policies and other benefits."

Word of the letter spread quickly through county government buildings and reached the county lawmakers meeting with Budget Director Joseph Passafiume in their first hearings on the budget.

Legislature Majority Leader Lynn M. Marinelli, D-Town of Tonawanda, told Passafiume she was disappointed the letter went out with no warning to lawmakers. Legislator Albert DeBenedetti, D-Buffalo, chairman of the Finance and Management Committee, agreed.

Passafiume said he had authorized it.

"I wanted everybody to know their position is being deleted," he said. He said the letter was not a formal layoff notice but an alert to workers that their jobs are on the line. Employees must be given a 30-day warning of a layoff.

The frustration level had risen quickly Friday morning when lawmakers started to review Giambra's budget, which would cut total county government spending to about $940 million from $1.1 billion, with most of the remaining outlays going to the health and welfare safety net financed by the state and federal governments.

To focus on the spending he can control, Giambra slashed money for road patrols and the arts. His budget would close libraries and leave no one to maintain county parks. Auto Bureau offices in Cheektowaga and Orchard Park would shut down, eliminating two revenue streams.

County Clerk David J. Swarts called that move and others that he said would devastate his office "slaughtering the cash cow."

Lawmakers and Passafiume started to spar over who was responsible for the problem. Legislators asked why the Giambra team cut taxes and plundered reserves to the point where the county now faces a $130 million deficit next year.

Passafiume reminded legislators, particularly the Democrats, that they had approved past budgets. Unanimously.

"You knew when you voted on budgets what the revenues were going to be," he said. "It's a joint effort. To suggest all the concerns are on the executive's side is not accurate."

Soon, DeBenedetti reminded those at the meeting that Giambra had won budget votes by threatening to withhold public benefit money -- legislators' pork spending.

As they reviewed the past, nearly everyone agreed the county doesn't need more from taxpayers just because of a recent spike in the Medicaid program, nor because the everyday costs of government have risen by $130 million.

They haven't.

The county needs more from taxpayers because officials no longer can rely on past methods of paying bills. They no longer can dip as needed into savings accounts. Nor can they borrow against an asset, similar to taking out a second mortgage, as they did by selling the Erie County Medical Center to a new public benefit corporation.

Passafiume, the lawmakers and aides to the county comptroller agreed that the only way to preserve the government at current levels is to find a new and reliable source of money, as the bond-rating agencies that have lowered the county's credit rating point out.

In other words, more taxes.

A few hours later, both DeBenedetti and Marinelli told Passafiume that if the county executive wants to add income from a higher sales tax to next year's budget, then by law he must make the first move. They asked him to provide additional information on a sales tax increase. The data should arrive Monday.

DeBenedetti said negotiations should begin, since the budget must be completed by Dec. 7.

"And I mean negotiation in the most serious sense of the word," DeBenedetti said. "There has to be a spirit of compromise."


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