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County board reasserts its 'hard' control Unanimously rejects budget, 4-year forecast as imbalanced, too reliant on tax increases

Erie County's state-appointed control board late Thursday branded the county's 2007 budget and its four-year financial forecast as imbalanced, ensuring that the board remains "hard" in taking a more aggressive role over the government's finances for at least another year.

The control board surprised no one by rejecting the financial documents and refusing to let the Giambra administration out of its woodshed, in which the control board so far has wielded the disciplinary tools of a hiring freeze and the right to reject large contracts.

The state appointees often repeat that county leaders -- they usually mean County Executive Joel A. Giambra and his top staff -- too quickly favor tax increases over cuts in spending as the way to make ends meet.

"What strikes me repeatedly is there is a sense on the part of the administration that there is not a crisis. There is a sense on the part of the administration that the taxes here are not high enough," said member Stanley J. Keysa, a lawyer and a county official in the 1990s.

"They seem to lose track of the fact that this community has a crisis in terms of wealth generation," he said, moments before the board's unanimous vote. "We have had all sorts of industries leave this area. And their reasons for leaving this area are: The taxes and other costs here are too high."

County officials counter that Erie County's property tax rate is low when compared with those in the vast majority of New York counties and that county taxes are among the lowest tax bills homeowners face. In addition, county leaders say they have run through the majority of reforms put forth more than a year ago by a control board consultant and found many to be unworkable.

And while control board members look back fondly at Erie County's finances in the late 1990s, when the government held huge surpluses, property taxes were higher then. Taxpayers were charged $222 million in 1999. This year, it's about $195 million.

Erie County's sales tax, however, went from 8.25 cents to 8.75 cents on the dollar to pull the government out of its budget crisis of 2004-05. It will remain at 8.75 percent, New York's second-highest, for the foreseeable future.

Control board members said holes lurk in the 2007 budget and four-year plan because certain expenses, such as jail overtime, have been underestimated. Meanwhile, revenues, such as the natural growth in property taxes, have been overestimated through the rest of the decade.

Board members figured that income through 2010 has been overstated by a cumulative $114 million and expenses by $90 million.

County Budget Director James M. Hartman, the main architect of the 2007 budget and the four-year forecast, strongly disagrees with their findings. But at this point, there is little that county officials can do to return the control board to merely advisory status.

When the Fiscal Stability Authority declared itself a hard board in November, Giambra and the county's two largest unions sued on the grounds that the state panel had not even let the process of adopting a 2007 budget run its course.

That lawsuit is pending. But if Giambra and the unions now want to challenge the control board's status, they must question the board's legal right to declare that certain budget assumptions will not stand the test of time, deficits will erupt and they need to enter a "control period."

It looks as though the Giambra administration will not continue the challenge. Nor will it try to amend the four-year plan and the budget to address the board's issues.

"This process has run itself out," Hartman said. "Whatever we do, they would find a new set of problems. . . .

"The real question here is: If they really believe the 2007 budget is out of balance, why aren't they imposing a wage freeze? Why won't they impose a wage freeze? Because they are afraid of the unions. Because the unions will use their political clout to call the attention of the governor and the Legislature to what the control board is doing."


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