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If you're running for Erie County comptroller and budget deficits and layoffs suddenly dominate county government, you've been handed an "instant issue."

And if you're the eight-year incumbent presiding over financial affairs that earn new Wall Street kudos, then you've got yourself some campaign fodder, too.

That's exactly how the premier countywide contest of the 2001 political season is unfolding between Democratic challenger Jeff Swiatek and Republican incumbent Nancy A. Naples. In a race centering around the ho-hum world of debits and credits, the onslaught of fiscal problems suddenly descending upon the Rath Building is turning the last days of the contest into a blistering affair.

"It's a failure of leadership that allows this type of fiscal situation to develop," charged Swiatek, a Cheektowaga councilman. "Cutting taxes is the easy part. The much harder part is in controlling spending and controlling borrowing."

Naples is unfazed.

"We're one of the few municipalities in the country to get upgrades in credit ratings -- three times in the past two years," she countered. "That's due to how this county is managed."

In the days following revelations that Erie County faces a $12.5 million deficit next year, Swiatek contends Naples missed a slew of early warning signs. His latest round of television commercials is hammering home that point. And he says spending was never adequately curtailed after drastically reducing taxes -- a situation he said the comptroller never recognized.

"Ms. Naples is either unable or unwilling to be an independent fiscal watchdog," Swiatek said. "Instead, the taxpayers have to wonder what Ms. Naples has been watching the past two years, because she obviously missed this one."

Swiatek says the county's new deficit results from County Executive Joel A. Giambra's fiscal policies:

Cutting taxes by 31 percent, but increasing spending by 9 percent.

Adding 240 positions.

Increasing county debt.

Swiatek says he's all for tax cuts. And he acknowledges that the Giambra administration is ultimately responsible for the state of county finances. But he says Naples never issued warnings in the form of budget monitoring reports for July through September. Nor did she ever recognize ballooning Medicaid expenses, a decline in interest income, or that "someone apparently (is) hiding the sales tax receipts numbers."

"The facts . . . show neglect, they show inaction, and they show that Ms. Naples is more interested in playing politics than in doing the job she was elected to do," Swiatek charged.

As a result, Swiatek says, the $12.5 million figure now used to characterize Erie County's deficit next year "will likely be much larger."

Naples' attitude toward her opponent's charges could almost be described as amusement. She insists there is no "crisis," only a relatively minor decrease in revenues in the context of a $1.1 billion budget that can easily be rectified with minor spending cuts.

And even that does not stem from mismanagement, she insists, but from a combination of the economic downturn, the Sept. 11 terrorist attacks and resulting problems in New York State reimbursements.

Naples acknowledges the Giambra administration is proposing layoffs and other drastic measures, but as a way of addressing financial realities. Layoffs constitute one way to plug the hole, she said, but it is plugging the hole.

"Are we in a fiscal crisis now? No. Erie County is in great shape today," she said. "What we're saying is Erie County has a potential budget shortfall in 2002, and we're preparing for it now."

Just as Swiatek's latest round of television commercials blasts Naples over her alleged failures, her advertising concentrates on the upgrades of county bonds by national rating agencies. The latest, she says, is a Moody's upgrade from A3 to A2, providing substantial benefits for county borrowing.

She also dismisses any thought that the major tax cuts of 2000 approved by both Giambra and the County Legislature produced the current situation. She points out that the huge surpluses accumulated year after year by former County Executive Dennis T. Gorski's administration are not the way Giambra operates. As she resurrected issues from the 1999 county executive campaign, she insists that unnecessary reserves were finally returned to the taxpayers.

"That wasn't fat in the budget," she said. "My point of view is that was my money, and it shouldn't be sitting in county bank accounts. And we still have tremendous reserves.

"Sure, rating agencies love good reserves," she continued. "But the rating agencies consider many aspects. And strong and conservative fiscal management is the key."

In addition, the county has squirreled away $24 million in a special reserve fund for anticipated problems at Erie County Medical Center, she said, further reducing surpluses.

Naples also dismisses Swiatek's claim of 240 new jobs, blaming him for confusing new job titles for new jobs.

And she said a number of factors conspired to produce uneasiness in county government. Interest rates have declined, she said, but she dismisses Swiatek's claims that that is her fault. A slowdown in the national and local economy will most likely produce corresponding slowdowns in sales tax revenue, she said, and the effects of the Sept. 11 terrorist attacks will alter state reimbursements.

"I didn't know about Sept. 11; I didn't know our country would be at war, or the implications of state funding," she said. "I think we're heading for tough economic times. But we're planning for those events."

The campaign has become increasingly spirited in recent days as the two spar at public forums and commercials turn negative. Swiatek hinted in a news release this week that Naples failed to produce budget monitoring reports for July, August and September because the pre-election news was bad.

"Why isn't Nancy Naples doing her job?" he asked. "Why isn't Ms. Naples protecting the taxpayers' interests?"

Naples shot back that Swiatek should have checked with the Democratic chairman of the County Legislature -- Charles M. Swanick -- who authorized the county budget office in September to delete the July report and submit year-end forecasts by Nov. 1.


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