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By spending more surplus money and allocating less for union pay raises than the county manager recommended, a Niagara County Legislature committee reduced the 2005 property tax increase from 9 percent to about 6 percent Tuesday.

The Administration Committee also restored money for five not-for-profit entities that County Manager Gregory D. Lewis had left out of his budget proposal.

However, all five agencies received less than they requested, and four of them were put on notice that 2005 is the last year they can expect county funding.

The full Legislature will be asked to ratify the moves Dec. 7.

The county's unappropriated surplus is almost $15 million. Lewis had proposed applying $1.5 million of it to the 2005 budget, specifically for Medicaid. By a 5-1 vote, the committee increased the use of surplus funds to $2.8 million.

By the same margin, it also reduced from $1.3 million to $600,000 the amount Lewis had set aside to pay for the cost of expected contract settlements with the county's two largest unions.

Majority Leader Malcolm A. Needler, R-North Tonawanda, sponsored both moves.

Lewis said, "I would have preferred they not do that. I also honor their policy discussion. The buck stops with them."

The only vote against the changes came from Legislator William M. Davignon of North Tonawanda, the only Democrat who showed up for the meeting.

"This is a slippery slope we went down before," said Davignon, alluding to the county's draining of its surplus in the 1990s to avoid tax increases. The practice led to a 20 percent tax hike in 2001, when the surpluses were gone.

County Treasurer David S. Broderick said Wall Street won't look kindly on the decision to abandon a policy that capped the amount of surplus that can be spent at 6 percent of the budget.

"The fund-balance resolution got us back one of our (credit rating) downgrades from Moody's (Investors Service)," said Broderick. "If we mess with it, we're jeopardizing that position. . . . I think it's a mistake."

Needler insisted that the extra $1.3 million in surplus funds he wants to spend came from the 8 percent sales tax that the county imposed last year to help pay for Medicaid.

The county budgeted for $11 million in revenue from that source in 2003, but received $17 million because the tax increase took effect three months sooner than planned.

"There should be a fund with $6 million somewhere," Needler said.

Broderick said Needler is wrong, that the sales tax money was all spent on Medicaid last year and the surplus stemmed from other sources.

As for reducing the allocation for union raises, Needler said the county doesn't need as much as Lewis budgeted. "We've costed it out, and what's on the table is $600,000," he said.

Asked if the unions have agreed to that figure, Needler said, "No." But he said if the raises cost more than that, the county will find the money somewhere.

However, Lewis said the situation could be redeemed if the county wins savings on health insurance costs in the new contracts.

The committee restored funding for the county Council on Aging, the Niagara County Federation of Conservation Clubs, Niagara Hospice, Old Fort Niagara and the Commission on the Status of Women.


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