By Eileen Buckley
Buffalo, NY – Just one day after the Erie County Fiscal Stability Authority held its first session, the Giambra Administration declared an end to the 2005 fiscal crisis. A new round of revenues will put a stop to cash-flow problems and erase the current budget deficit for now. But 2006 remains uncertain.
It was the best news Erie County taxpayers have heard in months.
"The short term fiscal crisis of Erie County should be solved within the next ten days," County Executive Joel Giambra said.
Giambra and interim County Comptroller James Hartman say the county completed refinancing of tobacco settlement proceeds. This will generate a cash infusion of $110 million. Hartman says it is a very good deal for the county.
"We are going to have $110 million, and that will essentially resolve our cash flow needs for the rest of this year," Hartman said.
Hartman and Giambra say tobacco money, combined with $15 million in new sales tax revenues, will erase a $108 million deficit for 2005. That's $10 million less then what was projected by the state comptroller. But this latest round of cash does not ease the debt burden that is mounting for 2006. Giambra says he expects some type of tax hikes. While he says he believes sales tax is the best option, a property tax increase is likely.
"Right now it appears that there is going to have to be an increase in the property taxes to fix the structural deficit for 2006," Giambra said. "Whether or not it is sales or property taxes, we are still trying to quantify the gap between revenues and expenses. Then we have to decide what is the most appropriate use of of revenues."
Giambra said 11.2 million of the tobacco money will also be used for "pay-as-you-go" capital projects.