Political hypocrisy and malfeasance SpeakupWNY | Buffalo NY and Buffalo News

No one ever considered the Erie County budget crisis anything but serious. However, there was belief that there was light at the end of the tunnel and resolve would come. Six months later, there is no resolve and the budget crisis continues to gain speed on a runaway track.

Six months later and our debt continues to rise. Six months later and our county legislature is more fractured than before. Six months later taxpayers are being told they are under-taxed – despite already being taxed 42 percent higher than the national average. Patronage and pork continues – although better hidden.

Everyone Erie County resident blames County Executive Joel Giambra for mismanaging the county’s finances, exhausting the reserves and tobacco fund settlement monies, for practicing pork and patronage policies, department scandals, deception in communicating the extent of the budget deficit, etc. And, rightfully so.

With few exceptions, county legislators should share the blame. It is always easy to point the finger, much more difficult to be part of the solution. Fifteen members couldn’t reach accord to present a solution to stop the bleeding. How dreadful is that?

What is more pathetic is that State Comptroller Alan Hevesi came to town and blames only the county executive and the county legislature for Erie County’s budget crisis. Hevesi suggested a control board for Erie County because, “the politics here are so toxic that the leaders need adult supervision.”

When questioned, Hevesi refused to acknowledge whether Giambra should resign. In total, Hevesi laid the blame for Erie County’s fiscal problems solely on Erie County’s mismanagement. Say what?

Hevesi states in his reports cover letter:

Role of Medicaid

The County Executive has declared that Erie County’s budget problems were caused almost exclusively by growing Medicaid and pension costs. The review found that from 1999 to 2003:

· Medicaid spending has increased much less than average in Erie, up six percent annually compared to 8.6 percent annually for all other counties (outside New York City).

· Erie increased spending in areas other than Medicaid and other mandates – the spending over which it has the most control – by 21.4 percent, compared to an average of 12.5 percent for the other counties (outside New York City).

· After a decade of very low pension costs due mainly to exceptionally strong financial markets, the stock market declined in 2001 and 2002, requiring a return to normal pension costs. All local governments faced the same increase. The County’s total employee benefit costs (of which pensions is one part) increased from $39.2 million in 1996 to $70.7 million in 2004, representing an average annual increase of 7.7 percent. When measured as a share of general fund expenditures, employee benefits grew from 4.8 percent in 1996 to 6.8 percent in 2004.

“Increasing costs of Medicaid and pensions are a serious problem for all counties, but only Erie County has such a severe budget crisis. That’s because of the rapid increase in spending over which Erie County does have control,” Hevesi said.

“As I have said many times, it is essential that New York State control rising Medicaid costs, which have created very serious problems for all counties. But Erie County’s leadership may have actually hurt the reform effort by not controlling its own spending and then trying to blame Medicaid costs for the problems it created for itself.”

“Erie County has suffered through many years of structurally imbalanced budgets, underestimated expenses and overestimated revenues; the chronic use of one-shot funding sources; the use of the entire fund balance leaving no reserve or contingency; and the use of debt to pay for operating expenses. In sum, Erie County has been systematically violating the fundamental rules of responsible financial management.”

When Hevesi stated that the costs to the county for the skyrocketing costs of Medicaid and state pension programs had little effect on the budget crisis, he showed his true political colors.

As Donn Esmonde so aptly wrote in his commentary, in Friday’s Buffalo News: “The county’s Medicaid bill inflated $82 million in the six years that Giambra was elected. That’s more than movie money. Add pension costs – at least $33 million more than five years ago – and it’s an extra $115 million on taxpayer backs since Giambra showed up. That nearly equals the $118 million hole we are looking at.”

Esmonde also points out that Hevesi makes out like it was the state legislature that called for Medicaid reform. To Giambra’s credit, he and other county executives lobbied Albany for such reform. Hevesi was at one time a member of the nationally acknowledged numero uno “dysfunctional” state legislature – and still are, despite getting their suspect huge deficit budget in on time. It’s the kettle calling the pot black again – the blame game.

Some county residents may voice opposition to a control board opining that the county loses control over the county’s direction and could cost the county some serious dollars. What’s your point? After six months we continue to bleed to death and our leaders are clueless. How could anything get worse?

Even members of the legislature want to see a control board come in for the sake of achieving true reform in government sizing, spending and eliminating the patronage and pork that still exists. They believe that adding more tax revenue to a system that still needs reform is foolish.

Taxpayers are not paying their fair share

What was the taxpayer revolt’s original intention? Wasn’t it to take a stand to say we have had enough tax increases? Wasn’t it to petition the county to control spending and make the necessary cuts to avoid a tax increase? But wasn’t it also to draw Albany’s attention that they were a major part of the problem and that they needed to enact fiscal reform? Well, the political blame game continues and the taxpayers will become the fall guys for not paying higher taxes, their fair share to allow our inept and ineffectual state and local leaders the opportunity to continue the abominable status quo.

Hevesi, with support from the SEIU (Service Employees International Union) – no surprise there - reports that dramatic reduction in property taxes, the county’s general inattention to the changes occurring in its revenue sources, its unrealistic expenditure predictions and the use of one shots (reserves and tobacco money) is similar to the pattern of fiscal mismanagement that led to the imposition of the State oversight board in Nassau County’s finances.

Hevesi reports that the reduction in Erie County’s tax rate - down from $7.8 per thousand of property assessment to $4.62 per thousand – resulted in a significant decline in the funds raised by the county. The rate reduction resulted in the county collecting about $70 million less each year.

Hevesi is telling us that there are several ways to resolve the budget crisis: additional budget reductions, a sales tax increase, a mid-year property tax increase, and deficit funding – or a combination of such tactics.

A 1 percent sales tax increase for the remainder of the fiscal year would only bring in $60 million in revenue. Raising the property tax rate from the current $4.62 per thousand of property assessment would bring in $100 million. – and the 63 percent increase would still be below the tax rate most other counties pay.

Regardless, it appears near seven months of petitioning by taxpayers for state and local fiscal reform was for naught. Or, was it. Several spineless, unproductive county legislators have chosen not to seek re-election. Some others will pay for their folly.

Voters should also take note of our state representatives and how they conducted themselves during the budget crisis. Unfortunately, the Democrat and Republican Party hierarchies will fill their endorsements with new faces who are just as willing to continue the political class status quo.