WGRZ NBC-2

Erie County Faces Fiscal Crisis in 2007

Erie County will keep all of the money from that one-penny this year, an estimated $120 million.

That means the Erie County budget is balanced for this year, 2006. That’s the good news.

"I can now report to Wall Street and credit agencies that we have a balanced budget," said Democratic Erie County Comptroller Mark Poloncarz.

The bad news: Erie County’s 2007 budget is already out of whack. And the deficit is a big one.

"I think for 2007 we are in for tough times," said Republican Legislator Mike Ranzenhofer.

Here’s why: Erie County’s budget hole for 2007 is now $12.5 million dollars. That’s the money the Legislature agreed to share next year.

But as part of Erie County’s four-year financial plan, the Erie County Executive and ultimately the Legislature have to implement $40 million in savings. That was part of the deal to fend off a tough as nails Control Board.

So add the $12.5 million the County’s giving to communities, and the $40 million in savings, that adds up to a $52.5 million budget hole next year.

2 On Your Side’s Stefan Mychajliw: "Aren't you 52-and-a-half-million dollars in the hole right now?"

Republican Legislator Dr. Barry Weinstein: "Yes. And it's not pretty."

Most of the budget really rides on the success or failure of finding $40 million in savings within that four-year financial plan, and then making sure those savings are implemented within Erie County government.

Erie County Legislature Majority Leader Maria Whyte: "We will be calling department heads into the committee meetings, which is a public process, and say, to ask: 'are you on target for your four-year plan initiatives? What are you doing to implement this?"

Mychajliw: "It seems as though there's a lot riding on the savings of the four year plan?"

Whyte: "Oh absolutely. That was never in question Stefan. The four year plan is an ambitious challenge."

Legislature Chairwoman Lynn Marinelli has already assigned Legislators specific parts of the four-year plan to keep a close eye on, to make sure department heads are actually implementing savings within the four-year plan.

"We’re starting now. We’re not going to wait until October or November. We’re starting now," said Marinelli.

If those savings aren’t implemented, then the Erie County Executive and ultimately the Erie County Legislature has to come up with $52 million in cuts, reduction in services, or tax increases to fill that budget hole.

Mychajliw: "If you don't see savings in this four year plan, aren't you going to have to either raise sales or property taxes or cut services?"

Whyte: "I just don't want to think about what's going to happen if we don't achieve our goals."

"It's incumbent upon the Legislature and the County Executive and my office to start working on the 2007 budget now," added Poloncarz.

"I don't know how, without the willingness to make reductions, that you're not going to see a substantial property tax increase next year, or a further increase in the sales tax," said Ranzenhofer.

Copyright WGRZ-TV, 2006