Shrinking Government by Growing Government? When Budget Cuts Aren't Real Cuts By Peter Livingston













Erie County’s budget for 2015 is set. After reading various media accounts and press releases, it is not entirely clear what this means for the average property taxpayer. This is not intended as a shot at the media. The have the unenviable task of presenting abbreviated facts in a coherent and concise fashion, with the latter two parameters frequently being mutually exclusive. I am not tasked with being either concise or coherent, so I offer my observations on the budget, for what they are worth. Hopefully, they are worth more than the tax cut for the average homeowner.

Here is what I have gleaned from the media accounts so far, which may or may not be accurate: The Erie County Legislature amended the County Executive’s budget. These amendments included cuts to office supplies, public safety and libraries. The legislature may or may not have worked with the County Executive to make these cuts. The cuts will result in the county tax rate going from $5.03/$1000 assessed value to $4.99/$1000 assessed value.

I find the claim that the Legislature and County Executive Mark Poloncarz worked together to deliver a tax cut dubious. For his past two budgets, Poloncarz has attacked Republican claims that they could cut his proposed budget with great skepticism and hostility. When the Republicans thwarted his plan for a tax increase a couple of years ago, Poloncarz cried that great calamity would ensue. Instead, the County ended the year with a surplus. Last year, he bemoaned that he wouldn’t request a tax increase because the Republicans wouldn’t let him. Recently (before the storm), the County was on pace to finish the year with an $8 million surplus.

This year, Poloncarz again presented a budget which he claimed did not increase taxes. He suggested that there was little to no wiggle room and that any cuts would be an affront to what he termed the “people’s mandates.” He cautioned the legislature to avoid smoke and mirror cuts. This presented a challenge to the legislature’s Republicans, who successfully campaigned on smaller, more efficient government. On Sunday, legislature Chairman John Mills drew a line in the sand by declaring that there would be a tax cut, although tempering expectations by adding “it won’t be an awful lot.” The stage was set for a showdown at the budget meeting.

I don’t know exactly what happened at the meeting. Judging by television coverage, not too much. As previously stated though, the tax rate did decrease by 4 cents per $1000 assessed value. This is $5 for a $125,000 house. Poloncarz quickly praised the legislature for working with him to deliver a small tax decrease. The only part of his statement that is accurate is the word “small.”

Further, I fail to see how there was a tax decrease. This year, the county collected $241,721,087 in property taxes. In 2015, it will collect about $245,932,889. This is an increase of over $4 million. I suppose only in government can someone claim that increasing taxes $4 million dollars is a decrease. A claim could be made that the rate did go down, but even that claim is tenuous. There is no county tax rate. The county collects certain amounts from towns based on property value. Once the amount to be collected from a town is determined, the amount is divided up amongst the properties. Exemptions are factored in. Then the rate can be calculated. If you are fortunate to live in a town whose property has been determined to have increased in value, your rate may actually increase this year! But rest assured, Poloncarz will ignore that fact and the fact that he has never requested a tax decrease and actually wanted a tax increase when he sends you 150 reminders to vote for him next November.

I also find it troubling that, despite all of the rhetoric, I haven’t heard of any actual cuts to the current budget. If jobs were cut, I am certain we would have heard from the unions by now, like we did under the tenure of former County Executive Chris Collins. Instead, I have heard nothing in the media. If there were cuts to programs, we would have heard from those affected. 

I obtained from the legislature a copy of the amendments.  One million of the $2.25 million cut from the proposed budget was from over-inflated fringe benefits accounts.  These accounts are typically inflated and are probably more inflated this year due to the new union contract which raised salaries in exchange for reduced benefits.  Another $500,000 was added to an account which treats delays in filling positions as revenue.  Some of the positions in this account have remained vacant for years and are used solely to hide money to make budgets easier to reach targets.  The rest of the cuts were to some of the additional jobs requested by the County Executive and overtime accounts.  No current government jobs were harmed in the creation of the budget or its amendments.

As such, the cuts to the budget were not real cuts.  They merely reduced inflated accounts and eliminated jobs not yet created.  Maybe that is why there is no outcry from special interests about the "cuts."  However, the $250,000 in additions made by the legislature are very real. Many of these adds are aimed at addressing the persistent and increasing poverty in Erie County.  Despite claims to the contrary, the poor in Erie County are getting poorer and they are getting more company. 

Further, the legislature cut a couple of million from the $40 million in increases proposed by Poloncarz. This isn’t smaller government. It is government growing at a slower rate. It is a step in the right direction, but only the beginning of a long journey. Hopefully, it is a journey that our elected leaders have the fortitude to make.

Maybe more information will come out about budget over the next few days, but I doubt it. Most parties seem to have gotten what they wanted. Mr. Poloncarz can claim to have worked with the legislature and delivered a tax cut. The legislature can claim to have reduced the size of government. The taxpayers can believe that they have gotten a tax decrease.

And Santa will travel down my chimney with a sack full of gifts. Merry Christmas to all and to all a good night!

Comments? Please email me at peter.r.livingston@gmail.com. I also occasionally comment on Twitter @PRLivingston.




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