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Giambra Unveils $1.13 Billion 2003 Budget

By Eileen Buckley

Buffalo, NY – Erie County Executive Joel Giambra is suggesting that the county might be forced to consider a future sales tax increase to help balance future budgets. Giambra discussed the idea as he took the wraps off his 2003 proposed spending plan Wednesday.

Giambra says increasing the eight percent sales tax would be the best option in raising revenues instead of hiking property taxes. In fact, he even handed out "Zero" candy bars to emphasize a "zero" tax increase.

Erie County remains the highest taxed county in the nation. He says he doesn't want to continue to burden property owners.

"Property taxes are the most injurious tax known to mankind," Giambra said. "The sales tax is a much more progress tax. It is based on ability to pay. I think it is prudent to do the sales tax increase if we have to do a tax increase then the property tax."

In unveiling his $1.13 billion budget proposal, Giambra warned of a difficult fiscal year, projecting a $35 million deficit. The proposed spending plan would use reserve funds to cover the shortfall. But Giambra says an increase in the sales tax could help the county foot the bill for the rising cost of mandated Medicaid costs required by the state. He says the county might be forced to consider a sales tax increase in 2004 to help pay "extraordinary" increases in Medicaid costs.

"Unless New York State either caps or relieves the county's burden, we anticipate additional $16 million just in Medicaid costs for 2004, so that $35 million problem could become a $50 million problem in 2004," Giambra said.

Giambra says if he were to propose a sales tax increase, it could range from a quarter-of-a-percent to a full percentage point. The sales tax was increased from seven to eight percent back in 1985 to avoid a fiscal crisis. But the extra one percent remains a temporary tax and each year it needs to be approved by the state. Giambra says the state should make the eight percent permanent.

Democrats at the Erie County Legislature were still waiting to be briefed on Giambra's proposed budget Thursday afternoon. But Minority Leader Charles Swanick says from what he's heard, he believes the proposed package is a "good start" because it does not include a property tax hike and or reduction in services. But Swanick says he probably would not support a sales tax increase if proposed.

"The county executive would have to make a very strong case to do any kind of a new revenue, because he has been reducing property taxes or coming in with a zero property tax increase," Swanick said. "It is really in his hands to come in with a full presentation of that."

Swanick says due to a state deficit, the county must look closely at expenditures verses revenues to balance the budget.

"We want to go into this budget knowing all the costs can be met with the present revenues," Swanick said. "We also have to look at one-shot revenues. One shot revenues can get you in trouble. There's no guarantee they will be there the next year and most likely they are not."

Giambra's budget plan is conservative. It's $5 million less than last year. He says another burden is rising health care costs. Giambra's says the Erie County Medical Center will receive the same subsidy amount as this year, unless the hospital's employees union "cooperates" and helps the county create a public benefit corporation to operate the hospital.

"If the unions join with us in creating a new public benefit corporation at ECMC, we will make good on our pledge to add an additional $9 million to get them through 2003, as we begin to restructure how we are going to deliver services at a public facility," Giambra said.

Swanick says he has helped to arrange meetings with the unions and Giambra over the last three weeks.

"There are enough negotiations going on concerning ECMC. They have narrowed the problems to just a couple of items," Swanick said. "I do believe that we will proceed and get those resolved and move on with the public benefit corporation."

Other highlights of Giambra's spending plan include an eight percent increase in funding for various cultural and arts organizations. There are no reduction in jobs or increases in fees. It also calls for beginning construction of a new Public Safety Campus at ECC's downtown campus by the summer of 2003 and using $30 million in tobacco funds to repair deteriorating county bridges.

The full legislature receives the proposal Thursday. Lawmakers are scheduled to vote on a new budget November 25.