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Walter wants to redistribute sales tax; Poloncarz says it’s illegal

Ray Walter, the Republican candidate for Erie County Executive, vowed Tuesday to abolish the 1977 sales-tax sharing plan that he says unfairly favors Buffalo, Lackawanna and the City of Tonawanda over towns in the county.

The plan outlined by Walter would take about $41.7 million in sales tax revenue that currently goes to the three cities and spread it across the towns, villages and school districts, increasing the share of revenue for Buffalo Public Schools by $30 million over the next four years.

“My plan will dedicate $100 million more to education over the next four years. The troubled Buffalo Public Schools will get a $7.5 million shot in the arm every year. It’s their fair share,” said Walter, during a news conference outside the Edward Rath Erie County Office Building.

His announcement kicks off the 2015 general election campaign, two days before primary elections.

His opponent, Erie County Executive Mark C. Poloncarz, at a news conference of his own a couple of hours later, said Walter’s proposal would be “dead on arrival for both legal and practical purposes.”

The Democratic candidate, who is seeking his second term, noted that the 1977 agreement is between the county and the three cities. In 2004, Poloncarz said, the State Legislature changed language associated with the Buffalo Fiscal Stability Authority Act that directly affects Erie County.

“It pretty much says that Erie County cannot change the 1977 sales-tax sharing agreement without state approval because the sales tax that is used and provided to the City of Buffalo, under the agreement, does not go to the city … first. It goes to the Buffalo Fiscal Stability Authority to pay off the bonded indebtedness that exists that the Buffalo Fiscal Stability Authority has issued on behalf of the City of Buffalo,” Poloncarz said.

“The true legal ramification, which I’m surprised he doesn’t know as a state legislator, and as an attorney, is that we’re not allowed to change that agreement under the Buffalo Fiscal Stability Authority Act,” he added, noting that the mayors of Buffalo, Lackawanna and the City of Tonawanda also all assured him that they would not agree to a change in the agreement that saw their cities receiving less in sales tax revenues.

Walter challenged Poloncarz’s assessment of the agreement.

“Mark Poloncarz is right, he can’t negotiate a new agreement, but I can and will,” Walter responded in an email.

“What he doesn’t understand is the county holds all of the cards in this negotiation. The cities can only pre-empt half of the sales tax collected within their borders. That sum would be even less than they would get under my Fair Share Plan. This also has no bearing on the control board and their bonds. Once again, Mark Poloncarz shows us he is stuck in 1977. It’s time for new leadership,” he added.

Walter was joined Tuesday by several town supervisors and members of the Erie County Legislature’s Republican-aligned majority caucus, many of whom carried signs calling for “Fairness for Taxpayers” in each of the various towns in the county.

Under the current agreement sharing a 3 percent county portion of the 8.75 percent sales tax, the county retains 35.3 percent of the revenue, while 10 percent off the top is allocated to the three cities on the basis of population, with the towns and villages sharing 25.7 percent. The rest, 29 percent, is split among school districts.

Under his proposal, Walter said Erie County’s towns and villages would receive between $500,000 and $2 million extra each year.

“How can the county executive defend spending twice as much sales-tax revenue per capita in our cities than he does in our towns? This creates an unequal distribution,” said Walter.

“I will enact a sales-tax sharing plan that distributes revenues equally among all communities in Erie County, fairly and by population. We will also significantly increase the revenue we share with school districts, the single largest driver of our property taxes. This will help stabilize and cut property taxes while investing in our classrooms,” he said.