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Giambra plans 25% tax increase Details Expected Tonight Four-year plan includes fee hikes, deficit financing

Joel A. Giambra tonight is expected to unveil a plan to cure Erie County's budget crisis for 2006, using a property tax increase of about 25 percent, plenty of fees for myriad county services and deficit financing, sources familiar with the report said.

The Erie County executive planned to make his four-year plan public in a briefing for news reporters tonight, but his aides working on the document said they would have to hustle to meet that deadline.

A property tax increase of about 25 percent is less than previously predicted for Erie County in 2006. If Giambra can keep the tax increase at that level, it would add about $130 a year -- $11 a month -- to a home assessed at $100,000.

Just last week, Giambra acknowledged a 50 percent tax hike was possible, but the plan being completed today relies heavily on deficit financing -- a $46.5 million loan to keep the government's head above water and lessen the immediate hit to taxpayers.

Giambra and the Erie County control board's financial consultants -- The PFM Group -- briefed control board members on the plan late Monday, and after that two-hour conference call, PFM officials and Giambra aides were sent back to refine details.

It would be the control board's duty to arrange deficit financing, a rare method for Erie County government to buttress its financial footing. Deficit financing often signals a government in distress and straps taxpayers with a long-term repayment plan. Giambra had said it was a measure he wanted to avoid.

The 25 percent tax increase for 2006 would be followed by another 24 percent tax increase for 2007, according to the plan.

"While property tax adjustments are undesirable in a county facing economic challenges, such adjustments will keep the county competitive with respect to the rates of other upstate New York counties," the report said.

After seven years without a property tax increase, Erie County government has one of the state's lowest tax rates. Giambra, who ran as a tax-cutter and reduced the tax rate when he first took office in 2000, has been looking for ways to tell voters that he now needs them to pay more.

He pushed for a penny increase in the sales tax for 2005 but only got a quarter of a cent. The report to be unveiled today talks of the need for "property tax restorations." In other words, the tax rate will be pushed back to the level it was at when he took office.

Also for next year, county officials are assuming they will win a lawsuit that will relieve them of a $13.5 million subsidy to the Erie County Medical Center, though the county will continue to pay for capital improvements there.

The report also mentions the tens of millions of dollars that can be saved by running the government more efficiently, and about $11.9 million in savings are identified for next year.

Fee increases are many, especially at the golf courses and parks. For example, a $6 fee will be charged to launch a boat from the county's facility. Fees also will be charged to people under probation department supervision, a step the County Legislature has already endorsed, and there will be attempts to run the jail and holding center more efficiently, so it doesn't drain millions of dollars for overtime paid to corrections officers.

The Legislature will be asked to approve the four-year plan and send it on to the control board by Oct. 1. If it doesn't the control board can turn from advisory in nature to one with teeth, able to freeze wages and force the government to live within its means.

e-mail: mspina@buffnews.com

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