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Poloncarz forecasts budget gaps in four-year plan

Erie County Executive Mark C. Poloncarz’s new plan would cut jobs, use surplus and scale back on large projects during the next four years, but he doesn’t believe that will be enough to balance the county budget as expenses rise.

So his latest county four-year plan comes with a choice: raise taxes or cut spending on popular items such as road patrols, parks and libraries. His budget staff, however, said it’s too early to determine which route the county executive will recommend.

“We’re simply saying if there’s no willingness to raise revenue, or some combination of revenue and cuts, then meaningful substantiative cuts to recurring expenses need to happen, not one-time gimmicks,” said Deputy Budget Director Timothy Callan.

Poloncarz had to rewrite his four-year plan after county legislators turned down his proposal to increase property taxes this year.

His budget staff estimates the county will face average annual budget gaps of $8.5 million in 2014, 2015 and 2016 even after scaling back on big projects, eliminating jobs as people leave and dipping into money the county has set aside for unexpected expenses. The annual gap would be less than 1 percent of the $1.48 billion the county expects to spend in 2016.

To close those gaps, Poloncarz has proposed a list of options that range from raising taxes to cutting back on road repairs.

He also has told the state-appointed county control board that he plans to spend the next eight months canvassing legislators to determine if they’d be willing to raise taxes next year. If not, the list of options includes cuts to areas of the budget over which county lawmakers have the most control – from after-school programs to highway work to tourism efforts.

His budget staff presented the list as a range of options as the county faces increasing costs such as health insurance, pension contributions and inflation.

They also have lowered sales tax expectations.

“This county executive does not want to do these gap closers,” Callan said. “He doesn’t even want to think about them.”

But the proposal drew sharp reaction from other county officials.

Sheriff Timothy Howard said he would “aggressively resist” any reductions in his road patrol unit.

County Comptroller Stefan Mychajliw criticized the latest four-year plan for offering budget choices reminiscent of 2004, when then-County Executive Joel Giambra offered legislators a choice between a “green budget” that raised sales taxes or a “red budget” with austere budget cuts.

Back then, the county faced hundreds of layoffs and a deep budget deficit that was much larger than the current projected gaps.

“The administration’s threat is there in black and white: pass a property tax increase, or services will be drastically cut,” Mychajliw wrote to Fiscal Stability Authority Chairman James Sampson this week.

The Poloncarz administration, however, said the new four-year plan simply lays out options for county lawmakers, not threats about what must happen.

“Choices, even painful ones, must be made,” Budget Director Robert W. Keating wrote in response to Mychajliw’s letter. “The county executive made it clear during deliberations on the 2013 budget and afterwards that he is prepared to lead the deliberations that will produce a solution, perhaps, a painful solution, that gains a majority of support in the Legislature.”

The county control board, which serves as an advisory board appointed by the state, will spend the next week examining the latest four-year plan to determine whether Poloncarz’s budget assumptions are reasonable.

Board members will have the choice to exert more control over the county’s finances by entering a “control period” if they believe the budget is out of balance or not doable.

“Based on the questions that they’ve had in our discussions with them, I have no reason to believe they’re going to re-enter a control period,” Callan said. “But they’re concerned about the Legislature’s amendments. They’re concerned about the out-year gaps.”

The Legislature late last year turned down Poloncarz’s proposal to raise county property taxes in 2013, instead implementing a series of budget cuts that Poloncarz believes are not sustainable. The same group of legislators will vote on his proposed 2014 budget later this year.

By then, Keating said, the county will have a clearer picture on which to base sales tax and other revenue projections

“Three months from now we may have a totally different perspective,” Keating said.