WNED 970 News

Sub-Prime Crisis Impacts County Taxpayers

Mike Desmond

BUFFALO (2007-12-21) Erie County residents haven't been hit too hard by the meltdown in the credit markets over sub-prime mortgages because house prices never rose they way they did in much of the nation.

However, the county, its municipalities, and its taxpayers are going to be hit hard by the fallout, according to County Comptroller Mark Poloncarz.

Poloncarz is watching the prices for insurance on a planned $52-million county bond sale skyrocket. It's been stalled for months and now that the loan is finally falling into place, Poloncarz says insurance costs will rise.

"We're finding out bond insurance is much more expensive now than it was three months ago. It's almost double. That's sad because the people of Erie County are going to be paying more," Poloncarz said.

Poloncarz says bond insurance is becoming so expensive it may be cheaper to simply sell the bonds and pay a slightly higher interest rate.