Erie County taps financial markets for big loan

May 24, 2013

Erie County's finances are looking a little shaky as it goes into the financial markets for the biggest loan since the fiscally-disastrous days of the "Red-Green" budget. 

Erie County Legislature
Credit WBFO News file photo

The county is going out to borrow $130 million to carry it through the rest of the year along with taxes and aid, up from an estimate of $110 million just a few weeks ago.

The county legislature approved the borrowing at its regular session Thursday.

The amount of the annual cash-flow borrowing varies wildly from year to year, with nothing borrowed some years while other years it totals the $75 million of last year.

County comptroller Stefan Mychajliw says some costs are up and some revenues are down and the Poloncarz Administration was overly optimistic in its sales tax estimates.

"Incredibly aggressive in their sales tax revenue projections. So far, year-to-date, it has grown .23 percent.  In order for the county executive to hit his project targeted of $426 million, it has to grow five-percent for the rest of the year. I don't think anyone in their right mind will think it's going to grow that big. If it stays at . 23 percent, we would have a $14 million dollar hole in the budget," said Mychajliw.

Mychajliw says welfare costs are rising and the costs of each case are also rising.

While the county gets the cash, the actual borrowing will be done by the County Control Board. The loan is usually for about one-year.

Legislators also voted to install a residency requirement for county workers. It wouldn't apply to current workers, with Legislator Joseph Lorigo saying there are around 50 who live outside the county.

Lorigo is rejected concerns from the administration about the legality of the measure.

"Several other counties in the area...eight in fact...have very similar laws that were passed without the need for a referendum, haven't been challenged and are working to keep jobs in their local communities," said Lorigo.

Democratic Legislator Thomas Loughran voted with the five Republicans to put the measure up for a vote and then to approve it.