With the Niagara County Legislature pushing for an 8 percent sales tax again, the county is being hit from all sides.
The state legislators who would be asked to sponsor the increase in Albany want proof the county really needs the money, won't waste it and is changing its reputation as a sinkhole of waste and ineptitude.
The business community, which has long resisted a sales tax increase, says the county needs to clean up its fiscal act first.
Town supervisors are either against the increase altogether or unhappy that the county doesn't intend to share it with them.
Legislature Chairman Bradley E. Erck, D-Lockport, said there is no hope of avoiding a property tax increase for 2003. The only question is how big it will be.
In legal terms, the county is asking to increase its local sales tax from 3 percent to 4 percent. The state charges 4 percent, so the current tax rate of 7 percent results from adding the two taxes together. Despite that, the debaters always use the terms "7 percent" and "8 percent."
The increase would bring in roughly $20 million extra per year to the county treasury, but the process is a long way from being complete.
The County Legislature took the first step Nov. 6 by voting 18-1 in favor of a directive that the county attorney's office prepare legislation to raise the tax. Actually, all the lawyers intended to do was write a letter asking the state Department of Taxation and Finance to do the writing.
After that, Assembly and Senate sponsors must be found to introduce the bill. Once it has a bill number, the County Legislature would have to vote to formally request its passage. If the bill passes and is signed by the governor, the County Legislature needs to take another vote before the tax can take effect.
The soonest the sales tax could increase is March 1. If that date is missed, the next possible date is June 1.
"I don't think we have to talk the state representatives into the 8 percent sales tax in Niagara County," said Legislature Minority Leader Gerald K. Farnham, R-Lockport. "I think they know the need is there."
"They still have some convincing to do," said State Sen. George D. Maziarz, R-North Tonawanda. "They're always complaining about the cost of Medicaid. I want to see what they're going to spend it for. I want to see them give some relief for the property taxpayer by using it for Medicaid."
Erck said that's exactly what the county intends to do: "Probably pay down the Medicaid debt. We've already cut our quality of life programs," like Treatment Alternatives to Street Crime, domestic violence intervention and the culturals.
The latter programs are to be either abolished or deeply cut in the proposed 2003 budget.
"We're going to methodically demonstrate what we've done," Erck said, noting the county began laying off employees last month and will lay off more in the 2003 budget.
"A blind man could see what's going on around the state," said Legislator Daniel L. Mocniak, D-Niagara Falls. "Medicaid is killing us. Counties all over the state are looking at huge increases. Counties that aren't looking at huge increases are burning up their fund balances. We don't have any."
Unlike Erie County, which is avoiding a tax levy increase for 2003 by using surpluses, Niagara County is more than $6 million in the hole and likely will run an operating deficit this year, adding to that deficit.
Kenneth Crannell, spokesman for the State Association of Counties, said Ulster, Chemung, Chenango and Seneca counties sought and received sales tax increases this year, while Sullivan and Schenectady counties have already submitted formal requests for increases next year.
"I think as the county budget season progresses, you'll see more," Crannell said. "Every county in the state, whether they're wealthy or poor, has the same problem. Medicaid's growing so fast it's taking away from anything else they can do."
The cost of the health insurance program for the poor is spiraling upward because of increasing prescription drug costs and growing caseloads, especially since the state's new Child Health Plus program is considered part of Medicaid and requires the counties to foot 25 percent of the bill, just as they must for regular Medicaid.
Niagara County budgeted $32 million for Medicaid this year, but the actual cost is projected to be $33.07 million, according to county Budget Director Sharon Sacco.
For 2003, Sacco is budgeting an estimated Medicaid cost of $37.2 million. Medicaid, which accounted for 42.7 percent of this year's property tax levy, is expected to use up about the same proportion next year, according to preliminary budget data obtained last week.
Niagara County's sales tax has stood at 7 percent since 1969. There are 26 other counties in the state with sales tax rates of 7 percent or less, according to a state Department of Taxation and Finance publication issued this month.
Most of the 7 percent counties are small, rural ones. The largest county with 7 percent is Onondaga, where Syracuse is located. Westchester County currently has a 6.5 percent sales tax, the lowest in the state, but is expected to seek an increase, according to Crannell.
In Western New York, all the counties have 8 percent sales taxes except Niagara and Chautauqua, which charge 7 percent.
Niagara County keeps 47 percent of the 3 percent sales tax revenue and divides up the remaining 53 percent among the cities, towns and villages, based on their populations. However, the county does not intend to share the extra 1 percent.
"We should not share the 1 percent," Mocniak declared. "We're facing a budget crunch. We need that money. We're already sharing the (local) 3 percent, which we don't have to do."
"I think they should share it," said Niagara Falls City Administrator Albert T. Joseph. "We're all suffering countywide, and our sales tax is down considerably in 2002."
He said the city will see a shortfall from the $6.7 million in sales tax revenue it budgeted to receive from the county this year.
Lewiston Supervisor Sandra J. Maslen said she has no objection to the 8 percent, since local shoppers don't seem to mind paying it at Erie County malls.
"But I would definitely think if there was an increase it should be shared with all the municipalities. I understand the county's dilemma with the mandates, but I also think there are some cost savings they can introduce themselves," Maslen said.
Legislature Majority Leader Samuel P. Granieri said the county needs to save its own financial skin now.
"I think the municipalities have done a good job of putting their budgets together with the sales tax they've been receiving, and I have every confidence they'll continue to do so in the future," said Granieri, D-Niagara Falls.
"We do not get the help we need from the state, and the county is not serious about reducing the cost of government and providing better services," said Wheatfield Supervisor Timothy E. Demler. "I think the bulk of (the extra sales tax) should go to reducing property taxes, period. If there is a small portion left over that the towns could distribute for their budgets, I support that, of course. But the key is to reduce property taxes."
Maziarz said he doesn't care about the issue of sharing.
"If they used it to pay for Medicaid, that would justify (the county) keeping it all," he said.
He said he's more concerned about the county cleaning up its act.
"The problem I see is, it's tobacco money all over again. You're going to give them $20 million (a year) and five years from now they're going to be in the same state they are now."
Maziarz continued, "There was a proposal early on to consolidate some departments, like Parks and Public Works, but then somebody needed a job. Are they going to act on that or not? The other thing is this ridiculous cosmetic surgery."
Maziarz said the county needs to stop paying for the elective physical improvements of its employees in its self-funded benefit package. As of last week, such surgeries have cost the county $1,053,397 so far this year, according to the county risk and insurance office.
The county's nonunion employees no longer have such coverage; the two Sheriff's Department unions gave it up in the new contracts they ratified last month; and the county wants the other two major unions to forgo it in the new pacts currently being negotiated.
"We're eliminating a whole department, code enforcement," Erck said. "We (unofficially) consolidated the Youth Bureau with Social Services. We're looking at merging Parks and Public Works. I think we're making significant structural changes."
Robert L. Newman, president of the Niagara USA Chamber, said it's premature to consider a sales tax increase.
"We feel the county needs to implement some cost control and some long-term plans for reductions. . . . The Chamber is losing confidence in the ability of the Legislature to deal with these problems."
Asked who else would deal with them, Newman answered: "New legislators, I guess. We've got to live within our tax base. You can't tax your way to prosperity."