Erie County overestimated how much it would have to pay to the state pension system during the state’s prior fiscal year.
And that means the county will receive a credit of about $3.9 million in this year’s budget.
The overcalculation – based on the state’s calculations – amounts to a win for county taxpayers, according to County Comptroller Stefan I. Mychajliw, who released the information Monday.
“This is very, very good news,” Mychajliw said. “If there are any gaps in this year’s budget, this is a wonderful cushion for us to have.”
The State Comptroller’s Office estimates how much the county owes in pension payments based on the number of employees on the county payroll and the cost of their salaries.
However, Mychajliw said, there were significant reductions in the county workforce in 2011 under the administration of then-County Executive Chris Collins. That’s why the county wound up paying more on its pension bill to the state than was actually owed.
The county’s deputy comptroller for accounting, Gregory G. Gach, likened it to a homeowner whose monthly balanced billing from a utility was overestimated.
“Only until an exact reading would the homeowner then receive a credit towards future bills,” Gach said in a news release Monday from the County Comptroller’s Office.
In a letter addressed to the County Legislature on Monday, Gach estimated that the county’s general fund will be credited $3.9 million as a result of the overestimation of its pension obligations.
The total reduction of pension payments to the state at the end of the current fiscal year is estimated at $4.5 million, he added.
Mychajliw said the $3.9 million credit from the state can serve as a small safety net if sales tax revenue projections by the County Budget Office turn out to be overly aggressive. He said the substantial credit should give pause to the administration of County Executive Mark C. Poloncarz if it seeks another property tax increase next year. Mychajliw said the news from Albany reinforces the Legislature’s decision to reject Poloncarz’s proposed tax increase last year.
“The last thing the administration should do is hurt homeowners with higher taxes,” he said.
While the Poloncarz administration greeted Monday’s news positively, it offered a different take on the result of the estimated $3.9 million impact on the county’s general fund.
“It’s a pleasant surprise,” said Mark Cornell, county director of policy and communications.
“It’s the direct result of aggressive vacancy controls by this administration and the strategic elimination of unnecessary positions as we still work to close the budget gap that the Legislature minority created.”