Every Erie County department and independently elected county office has two weeks to submit a budget plan that would cut costs by 13.1%, in anticipation of major revenue shortfalls this year due to the coronavirus pandemic, said County Executive Mark Poloncarz on Friday.
That would represent a huge reduction considering that county spending normally grows by tens of millions of dollars every year due to rising personnel costs and other expenses.
The cost-cutting plans, due May 15, could result in cuts to employees and programs across the board. Erie County is one of the region's largest employers with 4,400 full-time and 1,000 part-time and seasonal employees.
Even if stimulus money were to come through from the federal government, Poloncarz said Friday, it won't be enough.
"It probably won't cover half of the lost revenue that we're projecting," he said.
It would, however, reduce the severity of cuts countywide.
Poloncarz noted that sales tax revenue alone is expected to fall short of projections by $200 million. And that doesn't count millions more in lost revenue due to shortfalls in hotel taxes, mortgage recording taxes and other revenues collected through fees.
Based on his conversations with U.S. Rep. Brian Higgins and Sen. Charles Schumer, he said, the county may receive $83 million in additional revenue through a fourth federal stimulus package, which would help but still leave a major financial gap.
The county did receive $160 million in federal stimulus money last week to offset direct, coronavirus-related expenses. But Comptroller Stefan Mychajliw and others have pointed out that those funds cannot be used to balance the budget or cover other revenue shortfalls.
The state, which contributes 11% of the county's revenue, is also expected to slash county funding by 20%, Poloncarz said.
"It's just not going to be good," he said. "I'm not happy about it. Nobody's happy about it. But we also have to ensure that I'm not going to go back to the public at a time of crisis next year and say, 'Well, you know what? We're going to raise your property taxes to make up for the shortfall.' That's just not going to happen. I have to have alternatives."
Aside from cutting expenses across the board, Poloncarz said he's reallocating surplus money from last year that would normally be rolled over to cover new programs and county initiatives. It will be directed into a $20 million gap-closing fund for 2020.
The county also benefits from entering the current budget year with healthy, unrestricted reserves, which stand at about $102 million. But use of that money, and any additional borrowing made by the county during this time of fiscal distress, is likely to guarantee a credit rating downgrade.
Cuts would not only impact Poloncarz's departments, but offices run by independently elected officials, including the sheriff, county clerk and comptroller.
"I'm hopeful that our partners in government understand the severity of this crisis, and as such, we'll come up with a plan that makes sense," Poloncarz said.
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