Giambra budgetary legacy starts with surplus
By Matthew Spina
NEWS STAFF REPORTER
Updated: 07/02/08 7:03 AM
One of Joel A. Giambra’s final budgets as county executive has ended with a comfortable surplus, thanks in large part to the state’s highest sales tax rate, the Canadian shoppers paying it, and higher gas prices.
The fortune generated by Erie County’s 4.75 cents on the dollar — which goes atop the state’s 4 cents — exceeded projections last year and continues to do so this year.
For most of 2007, county officials saw sales tax income mounting, and it helped the government weather surprises. Late last year, as Giambra was about to leave office, his budget officials optimistically predicted a $12 million surplus.
The exact surplus, $9.3 million, was made public Tuesday when the government released its 2007 financial statement.
The outside auditors who completed it confirmed that Erie County had ended a third straight year with money to store in a rainy day fund. The fund now totals $47.5 million for a county spending $1.4 billion a year.
“These results also demonstrate that the county is well on the path toward greater fiscal stability,” said County Comptroller Mark C. Poloncarz, whose office helps prepare the audit, “contrary to the statements of others.”
That was a swipe at the state-appointed Erie County Fiscal Stability Authority. The control board, as it is known, has warned of deficits in recent years, and it has rejected the four-year financial plans drafted by county officials to show they can balance future budgets.
Under Giambra and now County Executive Chris Collins, budget officials are forecasting no increase, or decline, in the sales tax rate and no increase in the property tax rate through 2011. But they do expect more property tax revenue as new properties go onto the tax rolls and assessed values rise.
To climb out of the budget meltdown of 2004 and 2005, Giambra emphasized the sales tax over the property tax. While both went up, Erie County’s property tax rate of about $5 for every $1,000 of assessed value is among the state’s lowest. But its sales tax rate is now New York’s highest. The income is shared with cities, towns, villages and, in Erie County, school districts.
Unknown to county officials in 2005 and 2006, the Canadian dollar would in 2007 be on par with U. S. currency. With their stronger dollar, Canadians saw Erie County’s 8.75 percent sales tax looking pretty good against Ontario’s 15 percent combined taxes, and they streamed across the border in droves to shop.
Meanwhile, the price of gas began its steady climb. That likely contributes to the rise in sales tax revenue, too, though economists and budget officials note that consumers have only so much to spend, and that they curtail other purchases to blunt their losses at the pump.
The 2007 budget was Giambra’s second-to-last. The county is now working under his swan song 2008 budget. When budget officials tracked spending through April, they said the government was doing $5.8 million better than expected, partly because of sales tax income and also because numerous jobs are being left vacant.
