Uncertainty Surrounds Thursday's Sales Tax Vote
By Joyce Kryszak
Buffalo, NY – Uncertainty over the infamous sales tax increase once again rears its ugly head. Erie County lawmakers today are poised to vote on the third and final measure that would enact the quarter percent hike. But will there be ten votes?
That tired, old phrase "deja vu all over again" does come to mind. As was the case last Febuary, a seemingly guaranteed sales tax hike is once again in jeopardy. Republican Chuck Swanick's vote is teetering as he jockeys for influence. Without his vote, the tax hike fails, and the $118 million of deficit borrowing has no repayment plan. County Comptroller Nancy Naples says that will undoubtedly make the bond raters jumpy.
"We are on what's called 'negative watch' with one agency and 'negative outlook' with the other," Naples said. "That means they are keeping a very diligent and close watch on whatever actions are taken in Erie County. They're looking for fiscal stability."
Naples says it's possible that shakiness could extend to investment bankers who are currently considering a crucial $80 million short term bond. Without that, county business grinds to a halt come mid July. But that's not County Executive Joel Giambra's understanding of the situation. Giambra says he spoke with the rating agencies. And he's confident another failed vote wouldn't matter very much.
"Deficit borrowing is going to have to take place," Giambra said. "If it's not a dedicated sales tax that pays for it, then that means an increase in property taxes to pay for it. So, they (rating agencies) understand the issues very well."
But Naples says that's not what she heard.
"I was on the call with both Moody's and Fitch with the County Executive. He was there and I was on a teleconference. I did not get the impression that nothing is wrong."
Naples says the rating agencies will take a variety of issues into account. That includes news that the county will soon have a control board. She believes, however, that factor could actually be helpful, since a control board helps fiscal stability. But Naples says it's far from certain whether that would be enough to counter yet another flip flop on the sales tax by local lawmakers.