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County Bond Counsel Says County Has Low Credibility among Investors

By Joyce Kryszak

Buffalo, NY – Erie County officials are squaring off again as the budget crisis reaches the breaking point.

Erie County Executive Joel Giambra outraged the county comptroller and some lawmakers when he said he won't sign off on an $80 million bond needed to meet payroll in July. Lawmakers already approved the bond but it still needs Giambra's signature. But he wants a public hearing first.

Erie County's bond counsel, Todd Miles, told lawmakers Wednesday this is no time for games -- by anyone. But he agreed with Giambra that underwriters do need to see the deficit issue settled before they'll issue any loans.

"I wouldn't presume at this point that you'll be able to get the deficit bond financing to close this entire gap on the theory that actions will be taken by this body six months from now," Miles said. "Frankly, your credibility is very low in the investment community."

To reassure lenders, Miles recommends cuts and a sales tax hike high enough to take care of more than the immediate problem. Republican Steve McCarville said he is leaning toward changing his no vote on the sales tax increase.

"I think people have been dodging and weaving a little bit, hoping someone else will vote for it (the tax increase)," McCarville said. "I was always hopeful that we could work together on a package of cuts. But the reason we can't is that the numbers simply do not add up."

Still, McCarville says he'd go no higher than a quarter percent. A special session is set for Tuesday.

Legislative leaders acknowledge a lot must be done between now and then to work a compromise of cuts and a sales tax increase. But Chairman George Holt won't be there for the talks. He leaves Thursday on vacation.

"I'm working very diligently," Holt said. "I don't have to be here physically. I'm accessible by phone. I'm available."

Another lawmaker, Democrat Al DeBenedetti announced Wednesday he'll soon take a permanent leave from legislative chambers. DeBenedetti, who lost his party's endorsement becomes the seventh lawmaker not seeking re-election.