By Daniel Pye<br><a href="mailto:pyed@gnnewspaper.com">E-mail Dan</a>
Numbers are in for Erie County’s sales tax revenue in this year’s first quarter, and the news isn’t good.
A letter from Erie County Comptroller Mark Poloncarz sent to the Collins administration Wednesday says that state data showed sales tax revenue in March was down 12.35 percent from last year. That leaves the county just more than 3 percent below budget so far this year. The county executive’s budget predicted Erie County would collect the same amount of sales tax in 2009 that it did in 2008.
“While we only have three full months of sales tax data to analyze, the trend is negative and disconcerting,” Poloncarz wrote.
The administration’s revised four year plan is in line with the 3 percent decrease — amounting to $12.7 million if the trend holds for the entire year — but predicts 3 percent growth for the next three years. While Poloncarz wrote that assertion “will require close monitoring,” Collins spokesman Grant Loomis said it’s only logical to predict sales tax will rise again after economic conditions improve.
“Over all, the county executive believes, like all recessions, the downturn we are in will pass,” Loomis said. “In the out years, we expect to see increases in sales tax revenue as consumer confidence improves.”
As Poloncarz points out in his letter, the county relies on sales tax funds for approximately one-third of county revenue. Legislator Thomas Loughran, who solely opposed the executive’s proposed zero-growth estimates during the 2009 budget process as overly optimistic, said disparities between recurring expenses and recurring revenue need to be addressed if the county is going to avoid another budget crisis.
“What’s going to get him off the hook this year is the stimulus funds, but that’s a one-time thing,” Loughran said. “But this process has serious structural deficiencies.”
Loomis said the administration believes the proper balance is being struck in regards to county income. But in his estimation, the comptroller has always preached that the county is too reliant on sales tax money without pointing out the only way to become less reliant on it.
“The comptroller is advocating that we’re relying too heavily on sales tax revenue, but he doesn’t finish the equation,” Loomis said. “Because the only other way to make up those funds is to increase the property tax, which is something the administration doesn’t support.”
Contact reporter Daniel Pye at 693-1000, ext. 158.
