MAYVILLE - The 2012 fiscal budget appears to be right on target, County Executive Greg Edwards told area business leaders last week.
The outlook for Chautauqua County in 2013, however, looks less promising.
During a Chamber of Commerce breakfast on Friday, Edwards fielded questions regarding the county budget and its potential impact going into next year.
"Well this fiscal year we're right on target so I don't see us having an issue with regard to depleting our budget and managing our expenses next year," he said.
Kitty Crow, county budget director, confirmed last month that the 2012 budget is shaping up to finish as projected.
But when it comes to the 2013 fiscal year, Edwards said he has been aware of a looming $13 to $14 million deficit. Through multi-year forecasting, the county executive said he has known for the "better part of three years" where the county would stand financially going into next year.
But even with that knowledge, county lawmakers were forced to use the county's fund balance this year in order to avoid going over the state's 2 percent property tax cap. Around $10 million is expected to be used from the fund balance in 2012.
"The issues are really no different than they were last year," Edwards said. "The tentative budget I've submitted last year would have begun to deal with these issues.
"But the decision on the legislature's side was to deal with the 2 percent property tax cap by using every possible fund balance revenue; one shot opportunity to fill the gap with hopes that things would change going into 2013."
The fund balance will be getting a boost this year as $10.1 million in reconciliations from 2011 were recently released. Included in that revenue stream is nearly $4 million in deferred revenue adjustments to the county Department of Social Services.
SALES TAX INCREASE
Edwards said offsetting next year's deficit may come down to raising property taxes by 20 percent.
Other options include raising the sales tax rate to its 2006 levels.
"The proposal that I have put out there that I believe is the best proposal is to return our sales tax rate to 8.25 percent,'" Edwards said.
"Does that increase the cost to people in Chautauqua County?" he asked. "It does; you go out there and buy a washing machine, it's going to cost you another $3. You go out there and buy a $20,000 car, it's going to cost you another $150."
Edwards, however, noted that unprocessed food and clothing items under $110 - which he called "essential" - do not carry sale tax.
"If we were return to a 8.25 percent sales tax ... we can cover our costs, I'll make some more cuts and we'll find ways to get that $13 million," he said. "That would solve this issue but we need state authorization."
In order to raise the sales tax above the state-set limit of 7 percent, a county needs state Senate and Assembly approval. For that to happen in Chautauqua County, both area state lawmakers would need to carry the resolution to Albany.
Assemblyman Andy Goodell, R-Chautauqua County, has not ruled out carrying the resolution to the state Capitol, however, he has stopped short of voicing his support for a sales tax increase. Instead, Goodell said he would turn to local officials for their guidance.
"Personally, of course, my (intention) is to reduce the costs of government at every level, state and federal," Goodell said in March. "As a state representative, I look to the local officials for their personal guidance in their particular municipality. The objection of government is to cut the costs of every taxpayer and implement a tax structure that is fair and balanced."
State Sen. Cathy Young, R-Olean, meanwhile, has outright spoken against any tax increase - pointing to the current stance of the Senate Republican Caucus to reject all increase requests.
Edwards acknowledged Young's refusal to carry the resolution and noted the hypocritical nature of the state Legislature, which has raised taxes itself and padded its own fund balance in the process.
"Why can New York City have over a 9 percent sales tax; why can Erie County have a 8.75 percent sales tax but yet there's some justification that Chautauqua County must stay at 7.5," Edwards said.
The county executive noted current bills in Albany that would raise the tax rate for counties to 4 percent -which would match the state rate and create a uniform 8 percent sales tax. Edwards said he will continue to monitor the legislations, noting that there are 12 counties across the state that are actively seeking to adjust their tax rates.
A resolution in the County Legislature to begin a formal process to raise the sales tax rate was tabled in March as a result of the matching bills.
"Our Senator is not supporting it," Edwards said of Young's position. "Again, she's one of the best Senators, if not the best Senator in all of New York state; I just happen to think she is wrong on this issue."