No new taxes are included in the 2014 budget proposal that Erie County Executive Mark C. Poloncarz released today, but the plan does call for slightly higher spending on popular public items such as more funding for libraries and aid to arts and cultural groups.
The proposed $1.39 billion budget would maintain a property tax rate of $5.03 per $1,000 of assessed valuation, yet spending under the plan would rise by $15.5 million, or 1.1 percent, over this year’s figure.
Poloncarz said the proposed budget would achieve his goal of maintaining and even increasing funding for popular services and programs without adding to the tax burden.
“It’s a very balanced budget that I believe meets the needs of this community,” he said.
Funding for what the administration calls “the people’s mandates” would increase by 1.5 percent. These include funding for Operation Primetime programming, rodent control and Cornell Cooperative Extension.
Various local groups protested when funds for those and other programs were cut under the administration of previous County Executive Chris Collins. Funding was restored when Poloncarz succeeded Collins in 2011.
In the 2014 proposal, arts and cultural groups would get a bigger percentage increase in funding than internal county government functions, Poloncarz said.
As part of the county’s capital projects, the library system would receive $250,000 to buy a new bookmobile.
“They still feel it’s a need in the community,” Poloncarz said.
The administration was able to maintain the current tax rate, in part, because of increases in property assessments generated by towns and villages.
That helped increase the county’s tax levy to $241.7 million, which, in turn, accrued as a benefit to the public library system under the county executive’s budget plan.
“We got $4.4 million in assessment growth,” Poloncarz said.
“I said last year, if we get assessment growth, I will give the library the comparable amount of assessment growth. Their portion of the assessment growth comes to about $415,000, which, in the grand scheme of things, is a much better proportion for the library than what the county is getting.”
The library received a $300,000 increase last year.
Among the largest drivers of increased spending in the budget, according to the administration, are rising caseloads and expenses in welfare programs, increased debt service, and the added cost of 12 mandated new jail management positions.
“For the first time in the history of Erie County, it will cost nearly $100 million to manage the jails,” Poloncarz said.
To balance the proposed budget, the administration first had to close an initial $29.2 million shortfall. To help bridge that gap, the administration cut a net 40 positions from the budget and closed out $3.9 million in dormant capital accounts.
In order to help close $8.6 million of the gap, the administration plans to take advantage of the state pension-stabilization program in which the county’s pension bill is estimated to be about $40 million. Instead, the county will pay about $32 million of that.
“We’re basically taking about 20 percent of our pension payment … and putting it in an amortization program,” Poloncarz explained.
“If we hadn’t done that, we would have had a significant shortfall and probably had to do a property tax increase,” he said.
Before the release of today’s budget proposal, Poloncarz already came under fire from the County Comptroller’s Office for his plan to use $5.4 million in county surplus funds to help balance the budget. The Budget Office first revealed its plans Oct. 1 as a precursor to today’s release.
County Comptroller Stefan I. Mychajliw said the fund balance is the county’s “rainy day account” and should not be used to fund recurring budget expenses.
However, Poloncarz said the use of those funds already has been approved by the state-appointed Erie County Fiscal Stability Authority as part of the county’s four-year financial plan. The administration also has budgeted the use of $2 million in surplus funds to pay for the reconstruction of some greenhouses at the Botanical Gardens.
“We have an $88 million fund balance right now,” Poloncarz said.
Under its 2014 budget plan, the administration has significantly reduced projected growth in sales tax revenue to 2.75 percent from its 3.5 percent projection in 2013.
“It’s one of the lowest estimates on sales tax growth in the last 10 years, other than after the fiscal crisis in 2009,” Poloncarz said. “Before that, in 2006 and 2007, Erie County sales tax was growing at a rate of 5.7 percent a year. … Last year it was trending at 3 percent.”
For much of the year, the administration has dismissed relentless criticisms from Mychajliw that its sales tax revenue estimates were too aggressive. Lowering the projections for next year is not a vindication of the comptroller’s warnings, Poloncarz said.
“Every time the comptroller hit me over the head, he never admitted to the public, ‘Oh, by the way, we’re in the black,’ ” the county executive said. “If he actually did the right thing, he would have said, ‘The numbers are not perfect, but that’s a budget.’ ”
He also denied assertions by the Comptroller’s Office that the county will close out the current year’s budget with a deficit.
“At this moment, we’re projecting a $1.6 million surplus,” Poloncarz said.
“In effect, it’ll be the smallest surplus – if that number holds – that Erie County will have had any time in the last 10 years, except for the years in which it ended up in a deficit.”
Other key assumptions in the administration’s budget plan include no increase in property taxes projected through 2017, as the real estate market and property tax revenue grow by 2 percent annually.
Poloncarz’s budget plan also reflects more favorable trends with lower caseloads in the county’s social welfare programs, which are expected to result in a slight reduction in the county’s total share of Medicaid costs from $219 million this year to $217 million next year.
Other budget highlights include:
• Additional funding for training new firefighters in the Department of Emergency Services.
• Addition of three new positions in the Parks Department in response to the growing use of the system.
• Additional funds for the Convention and Visitors Bureau, which will be split with Visit Buffalo Niagara and the Film Commission.
• A total of $5 million in capital projects at all three Erie Community College campuses.
The budget plan will go to the Legislature, which is scheduled to hold public hearings next month before a final budget is adopted Dec. 3.