As an independent auditor told county lawmakers Tuesday that Niagara County's financial condition is healthy, the Tax Foundation reported that Niagara continues to have the highest property taxes in the nation as a percentage of the value of homes.
Thomas Malecki of the Drescher and Malecki auditing firm reported that the county's unappropriated surplus as of the end of 2008 stood at $21.5 million, which was down $100,000 from the previous year and $200,000 less than the all-time high of $21.7 million in 2006.
The county ran $3.3 million in the black in 2008, Malecki said.
"That sounds like a lot, but it's a $300 million budget. That's 1 percent of expenditures. As a government, you want to break even," Malecki said.
The county's general fund spent $264.5 million in 2008, which was $10.4 million more than the previous year. General revenues totaled $267.8 million, an increase of almost $12 million from 2007.
County Legislator Danny W. Sklarski, D-Town of Niagara, pushed his suggestion for a tax stabilization fund, but Malecki was lukewarm toward it.
Malecki said the county's main short-term financial challenges are the annual increase in health care costs and a state-mandated increase in contributions to the public employee pension fund.
The county's current $5.6 million retirement cost figure will rise 50 percent next year, as the state tries to fill in for the losses the pension fund suffered in last year's Wall Street meltdown.
"You can now create a retirement reserve fund," Malecki suggested.
One thing that no reserve fund could cover is the county's unfunded future costs for retiree health insurance.
For Niagara, it's $241 million over the next 30 years -- an estimate that grew $15 million in the past year. "At this point, it's nothing more than a footnote, albeit a shocking footnote," Malecki said. "There's really not a lot you can do with the current employees."
County Manager Gregory D. Lewis said the county has put all its unions on the same health care plan, which has saved money on current benefits, but new employees are entitled to the same lifetime retirement health benefits as a county worker who retires now.
The Tax Foundation listed Niagara County No. 1 for the third time in the last four years, based on total property tax paid to all levels of government as a percentage of median home value. "Their methodology is flawed and doesn't take into account the efforts we've made to reduce taxes," Lewis said.
Niagara County legislators have reduced the county's tax rate four years in a row.
"The majority of the tax burden consists of school taxes. That's been the case and remains the case," said Legislature Majority Leader Richard E. Updegrove, R-Lockport. "There's been a consistent effort to reduce the county tax burden. We're hoping other entities follow our lead."
Every one of the top 10 counties in the Tax Foundation study is located in the western half of New York State. Niagara's figure, with tax bills averaging 2.89 percent of median home value, nosed out Monroe and Wayne counties.
Other local counties on the list included Chautauqua in fourth place, Cattaraugus sixth and Erie County eighth.
Lewis said the region's real estate market, with values among the lowest in the nation, makes Niagara County's middle-of-the-pack tax load look high when plotted against home values. "Some people would celebrate the fact that because of the low housing values, we weren't part of the [real estate] bubble," Lewis said.