By Associated Press
Buffalo, NY – State Comptroller Alan Hevesi on Monday recommended the state install a control board in Erie County to fix a budget mess he blamed on "colossal mismanagement."
A budget review just completed by Hevesi's office projects a $118.4 million budget deficit for the current fiscal year, despite the elimination of 1,500 jobs and severe cuts in programs and services earlier this year.
The deficit threatens to grow to $279 million in 2010, auditors said.
"At this point, the problem is so big and it is so late in the year, that it will require every possible measure to deal with the problem this year and to close the huge future gaps," said Hevesi, who released his findings to county lawmakers Monday.
Hevesi was highly critical of County Executive Joel Giambra's strategy of cutting property taxes while allowing spending to grow and then covering overspending with one-shot fixes, like using fund reserves and tobacco payments and selling off its hospital. He said the County Legislature shared the blame for approving the spending plans.
Hevesi also cited "misleading and inaccurate budget numbers" that he said overestimated projected sales tax revenues and underestimated the cost of fringe benefits, salaries and other employee costs for 2005.
"Erie County has been systematically violating the fundamental rules of responsible financial management," the comptroller said.
He said that a control board was not legally necessary because the county is far from taxing and borrowing limits allowed by the state, but recommended one because of the inability of the executive and legislative branches to solve the problem.
"I think the politics are so toxic ... that we have to bring in adult supervision," he said.
Giambra responded that he would accept Hevesi's report, while disputing some of the numbers, but disagreed that using up the county's surplus reserves to cut taxes was wrong.
"That is the choice we made," said Giambra, noting the County Legislature went along with the move. "We cut taxes and Alan Hevesi and I disagree on that choice."
Giambra said he would meet with the county comptroller, legislative leaders and department heads later Monday to begin to forge what has been an elusive consensus on a course of action.
County Comptroller Nancy Naples, who has long warned of the county's fiscal situation, said she would recommend a combination of measures, including raising the sales tax to finance deficit borrowing for this year, and raising the property tax beginning next year.
"I think if the Legislature and county executive don't act in concert today I think we do need a control board," she said.
Hevesi, too, said immediate action was necessary.
"If they don't act very quickly Erie County runs out of cash," he said.
A state-imposed control board has been overseeing spending in the county seat of Buffalo for the last two years in the wake of unmanageable budget deficits. That control board was approved at Hevesi's recommendation, following a similar budget review.