With $200M budget hole, Erie County considers reinstating hard control board

May 1, 2020

Erie County's fiscal situation is bad enough that county legislators Thursday talked about whether a hard control board is needed.

It's actually called the Fiscal Stability Authority, but generally known as the control board. Albany created the board after the county fell apart financially in the Red and Green Budget fiasco 15 years ago. Then-State Comptroller Alan Hevesi said "adult supervision" was needed to stabilize county finances.

Eventually, the budget was balanced, the county's piggy bank began to fill and the control board went soft and advisory. It is still there, with a smaller staff and a smaller budget, watching the fiscal picture.

During a meeting of the Finance and Management Committee, Legislator John Mills asked if a hard control board would help the fiscal picture.

"Since the Control Board is an animal of the state of New York — they placed that instrument on Erie County back in the Red-Green budget era — would it not be a good idea to try to take them off the sidelines and use them as an instrument to cut through maybe red tape or any kind of issues we may have with the State of New York when this all comes down to funding?" Mills asked.

Mills asked wheher a hard control board would give the county a long-term reduction in the interest rate on any kind of loan to bridge the gap on the budget.

Deputy County Comptroller Greg Gach said it might help the county's credit rating.

"Hard control board sends a good message to the rating agencies, quite frankly," Gach said. "Every rating review that we've done over the last — well, it's been over a decade now — of having a control board in place has mentioned the fact that a control board is there to assist a county, if needed."

Actual numbers are a little vague right now, although County Executive Mark Poloncarz said there is around a $200 million hole in the budget because of the rising cost of fighting COVID-19 and the dropping sales tax revenues of the lockdown. Erie County has already received around $160 million from the most recent stimulus bill to deal with healthcare costs and the county has $174 million in its reserves.

Control Board Chair James Sampson said members and staff are watching carefully.

"We have been in contact with the county executive, as well as their Budget Office. As the reports come in, we'll look at them and when it gets to the necessary point, we have enough information, I'm sure we will call a meeting to review it," Sampson said. "We do not want to go hard and we want to give the county an opportunity to work their way through this, and we recognize whatever fiscal challenges that they have is not because of poor management, but because of circumstances that were beyond their control."

Sampson said March revenue figures are not in yet. Once he has March-May figures, the county will have a better handle on its fiscal situation.