23 May 2005
Joel Giambra/Spectator
A control board for Erie County?
Erie County's finances are a mess. Buffalo Report commentator Spectator has several times in recent months faulted County Executive Joel Giambra for what Spectator sees as Giambra's misguided and failed fiscal and management policies. Two years ago, Giambra backed a fiscal control board for Buffalo, saying the city hadn't been able to manage its own finances well enough to avoid disaster. In his May17 Buffalo Report column, Spectator wrote, "One thing [Deputy Erie County Executive] Bruce Fisher and I can agree on in this one is that a control board is not needed for the county. The City's control board doesn't have the power to provide Buffalo with what it needs: money. Nor would a control board be able to provide the County with what it needs: a set of balls." But now Giambra has said that perhaps a fiscal control board is the only entity that can get Erie county's squabbling officials to work and play well together. Last week, Bruce Fisher sent Spectator Giambra's "Talking points on proposed Control Board for Erie County." Here are Giambra's memo and Spectator's response.
I. Joel Giambra: Talking points on proposed Control Board for Erie County
I will speak to you today briefly about why I believe Erie County needs a state financial oversight board.
But first, let us review some history.
Last December, the Erie County Legislature enacted a budget for Fiscal Year 2005. This budget was balanced – and it included a new revenue of $108 million from an additional one percent sales tax.
In January, the Erie County legislature reversed itself and decided NOT to include $108 million in new revenue.
The Legislature thus created a budget imbalance.
Pursuant to my responsibilities under the Erie County Charter, I as County Executive proposed a plan to reduce expenditures by $108 million in order to bring the budget into balance.
I tried to act unilaterally to head off a budget deficit. But State Supreme Court Judge Makowski opined that the County Legislature – and only the County Legislature – can take action on this plan.
Since January, we have been waiting for the Legislature to act. Since January, the Legislature has failed to act to fully balance the budget.
That is why today Erie County has a budget deficit of at least $60 million.
Remember. The Legislature first authorized a revenue that balanced the budget – then the legislature decided against the revenue. Without the revenue, there was a $108 million gap.
So far, the legislature has reduced that gap by only $48 million. There is a $60 million gap remaining.
The only way to close that gap is by authorizing a new revenue; authorizing new cuts; or by borrowing to close the gap.
Once again this week, the Legislature failed to do any of the above.
So once again, I am writing the County Legislature today explaining that they need to take action. I will explain that they must raise a revenue of at least $60 million in order to close the budget gap and erase the budget deficit.
The Legislature has also refused to authorize the issuance of short-term budget notes. Neither has the Legislature acted to ask the State of New York to issue long-term deficit bonds. You will recall that I communicated with the Erie County Legislature in writing two weeks ago to give them these options.
There must be revenue in order to close the budget gap. Only the Legislature can create that revenue. But the Legislature continues to fail to act either to reduce $60 million in appropriations or to raise $60 million in revenue.
Now let’s be clear. Raising this revenue will not bring back any county employees. Raising this revenue will not restore any programs. The revenues raised will be used exclusively for those appropriations which are in the 2005 budget.
But I am not confident, Ladies and Gentlemen, that the Erie County Legislature will act to solve this crisis.
So today I will be writing a formal communication to the Governor and to the Leaders of the State Senate and Assembly asking for a financial oversight board for Erie County.
The Erie County charter does not allow me to act unilaterally to do what must be done.
The Erie County Charter DOES allow and DOES instruct the Legislature that the Legislature must act.
But the Legislature refuses to act.
So I believe it is time for State government to take action – on a temporary basis – to step in with a financial oversight board – a Control Board.
And since a Control Board already exists here for Buffalo, I will be asking State leaders to amend the Buffalo Control Board legislation to that it could act to help Erie County.
No Control Board can raise taxes. But a Control Board could issue deficit notes or bonds. And a Control Board could force discussions – serious discussions – of restructuring.
But let’s not get ahead of ourselves. We need firm action by the Legislature. It is now May. They have failed to act appropriately. The County Executive does not have the legal authority to act unilaterally to raise revenue.
A Control Board that issues deficit bonds is not a good option. But because the Erie County Legislature continues to fail to act, a Control Board may be our only option.
II. Spectator responds
Mr. Fisher was quite explicit in previous editions of the Buffalo Report in pointing out why a control board for Buffalo was essential and why a similar oversight panel for Erie county was not necessary, to wit, Erie County is possessed of the means to get out of its fiscal mess while Buffalo is not. As close as a civilian observer can ascertain, that's still the case. Buffalo can't tax any more to fund its operations. The County won't. In the face of a deficit of more than $100 million, the county is adding people to the payroll. Parks workers here. Weights & Measures people there. Auto Bureau folks over here. At the same time, the County legislature refuses to consider significant reductions in county spending like the county Home & Infirmary, which is losing $5 million per year. The same folks whose undies got bunched about a possible sales tax increase are now picketing county hall to prevent the old folks' home from being closed. People want it both ways and the legislature is intent on giving it to them: We won't vote for the sales tax and we won't do meaningful service cuts. So we want a control board to come in and do what we won't - display some courage.
Most people don't really understand what a control board is. Most think it is empanelled with super powers to come in and fix that which is broken. That's not the case. First of all, there is no set structure or powers dedicated to a control board. Control boards are creatures of the state and each is unique in what it is empowered to do. Thus, the control board that fixed NYC in the 70s is far different from the control board that is gumming Buffalo's problems to death today.
County legislator Al DeBenedetti is right in saying that is hypocritical for the state to name the composition and scope of powers granted to a control board since the state is the largest cause of the problems afflicting local governments. But it is also hypocritical of DeBenedetti to mention that as it relates to Erie County after he was deafening in his silence when Giambra manipulated the governor into empanel a Buffalo control board. At last check, DeBenedetti still represents a city district in county government. His constituents were battered by the county's refusal to share its sales tax slush fund. His constituents paid a price for state legislation that negatively impacted on the city's ability to govern itself. His constituents were forced to hear the insulting "no handout, no bailout" mantra from the County Executive. Yet DeBenedetti said nothing.
What Mr. Giambra leaves out of his "talking points," which succeed the "history according to Joel," is what the county executive hopes to accomplish with a control board. The county has the means to fix its problem. It lacks only the will. Giambra thinks a control board will come in point out the sanity of the County Executive and the lunacy of the Legislature. And so what if they do? Will that confer courage to the Cowardly Lions in the Legislature? The answer, of course, is "no, it won't." Nor will a control board be able to implant a brain in the Scarecrow on the 16th Floor executive office of the Rath Bldg.Joel can't lead and the legislature can't follow. The one thing they have in common is both are waiting for outsiders to come in and do what they lack the guts to do on their own.
Copyright 2005 by Buffalo Report, Inc.