By Kenneth C. Kruly
Special to The News
The Erie County Medical Center has a long history of offering vital medical care in Western New York. The services provided to indigent patients, in particular, have often caused fiscal stress.
Originally a city hospital, its regional role grew steadily, and Erie County, with its broader tax base, eventually assumed responsibility. In 2004, when the Joel Giambra administration needed money following substantial cuts in the property tax levy and depletion of county financial reserves, ECMC became an autonomous public benefit corporation, basically buying itself from the county for $85 million. The county retained some fiscal responsibilities, providing a baseline of support in the annual amount of $16.2 million through a 2009 deal with the Chris Collins administration, while splitting Medicaid indigent care costs with the federal government.
In 2016 the county’s total costs for indigent care exploded to $38 million. The 2017 projected expense is $34 million. The somewhat unpredictable cost increases directly impact the county’s annual budgets and put a squeeze on other services, facilities and community programs supported by the county.
The current ECMC facility was built in the 1970s. The $100 million in improvements now proposed for the facility center around remodeling and the expansion of the emergency room, the area’s premier trauma center.
County Executive Mark C. Poloncarz proposed selling county bonds for the hospital improvements, requesting that the hospital return savings from the lower county bond costs, which could then be used to pay for some of the county’s ECMC obligations.
A recent legislative attempt to approve the county bond fell one vote short of the needed eight. Four legislators, led by Majority Leader Joseph Lorigo, were opposed. Lorigo suggested that Poloncarz wants to use the savings from a county sale of the hospital bonds to fill a hole in the county budget, describing the situation as a “self-created budget crisis.”
The annual county budget is a product of the executive’s proposal and the Legislature’s amendments and approval. The Republican-led Legislature has unanimously approved three consecutive Poloncarz-proposed budgets, so there has been shared responsibility for county spending.
The challenge for accomplishing the ECMC renovations is how to finance them. The Erie County Fiscal Stability Authority, with its superior bond rating, could save more money than the county could. The Legislature could approve the authority action with a six-vote majority.
The hospital preferred a 30-year bond issue, but the authority can sell only 22-year notes. A shorter term would require higher annual costs for ECMC, but the bonds would be retired sooner than originally planned.
The 2018 county budget will not be approved until December. Once the Fiscal Stability Authority approves the bond issue, the county executive and the Legislature would have some time to plan how the growing indigent patient costs will be handled this year and in the future. These are the sorts of problems that the county executive and the County Legislature are elected to solve, together.
Kenneth C. Kruly is a former member of the Erie County Fiscal Stability Authority and a former Erie County budget director.