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Fiscal restraint needed Still too early for city officials to declare financial independence

Mayor Byron W. Brown's push for financial independence from control board oversight is premature. Buffalo still can't stand on its own, financially, and the fiscal restraint imposed by the state-mandated board remains essential. For that reason, Gov. Eliot L. Spitzer should continue to oppose the unwise efforts by local state legislators to undercut the board, and insist on keeping it strong.

Buffalo now is better managed and the financial team in City Hall is a strong one. But the city's return toward healthier budgets -- and its current ability to afford a single-step increase in city worker wages -- comes because of control board restraints, not despite them. In particular, the wage freeze so unpopular with city workers capped city spending on earlier contract provisions that the city could no longer afford, and gave City Hall the breathing room to halt a slide into ruin and to craft better future budgets.

A second major factor in the city's recovery has been increased state aid, a budget-saving benefit with an edge. The money is well matched with the mayor's strategy of funding efforts that will build the tax base and the local economy, a needed step toward future increased self-sufficiency. But the city's over-dependence on state handouts in the past is precisely what made it so vulnerable to the sudden cut in aid triggered by the state's own financial problems immediately after the World Trade Center terrorist attacks.

That sudden gap, for a city near its constitutional taxing limit, triggered the control board. The state won't guarantee future increased aid. Any careless return to state-aid addiction, for a city still drowning in costly work rules and practices, is a return to the same vulnerability -- no matter how politically expedient it may be to use state handouts to restart wage and other operating cost escalations.

Acknowledging that reality in no way diminishes City Hall's progress in restoring fiscal health. Recent budgets have reflected solid and sound gains in boosting reserves, pulling back from taxation limits and making specifically-targeted gains in service delivery, no small feats in this era. And it in no way means that city workers -- especially in the police and fire departments, where danger is part of the job -- don't deserve pay raises that have been long delayed. They do -- as soon as pay hikes are verifiably and unmistakably affordable now and in the future years in which they also apply.

But that verification should be done by the control board, not yet by the Brown administration. City Hall can make the case, but the Buffalo Fiscal Stability Authority -- which has shown the guts to stand up to criticism and abuse, for the sake of current and future taxpayers -- is much better suited to do that than any city administration. It can do so because it is more politically insulated from union pressure than elected city leaders -- and it is Spitzer's duty to make sure it stays that way, and stays in its needed oversight role until either tax-base recovery or structural spending reform, or both, better balance city spending and revenues.

For years, it has been easier for elected leaders in poor urban centers like Buffalo to give the work force future benefits -- retirement bonuses, premium health coverage, generous overtime and pension formulas and the like -- than immediate salary hikes, although those also were common. The result was a growing imbalance, and if Buffalo were a business the inevitable end, absent any union concessions, would have been bankruptcy and unemployment. But cities can't fold, and state laws and arbitration policies have undercut labor negotiations and given too little weight to municipalities' ability to pay.

Buffalo's dependence on Albany is again growing dramatically, from $103 million to $160 million a year in the four years since the Buffalo Fiscal Stability Authority was imposed. Albany plans to give more money, $200 million, to the city three years from now. Full financial independence from state aid is unlikely, for the foreseeable future, and aid is indeed welcome. But 9/1 1 proved that state aid is an uncertain revenue stream, and not one on which to base a full return to business as usual.

The Brown administration deserves credit for forging ahead. But its bridge to the future still is the fiscal stability provided by the control board.

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