BUFFALO, N.Y. (WBEN) - Erie County Comptroller is anticipating a $207 million shortfall in revenues for Erie County because of the coronavirus pandemic and has declared a deficit for the county.
A deficit can be declared when revenues cannot meet the amounts appropriated or when expenses are projected to be more than 50 percent of the county's unreserved fund balance as of the end of the last fiscal year. Erie County had roughly $100 million in its reserves, or what's commonly known as its "rainy day fund", meaning a deficit could have been declared if revenues losses were only about $50 million.
"It's not just raining. It's a monsoon out there when it comes to the collapse of the economy," Stefan Mychajliw said. "The ripple effect is being felt here in Erie County."
The county's fiscal watchdog said that Erie County will fall short in its sales tax revenue by approximately $128 million. Mychajliw also said that localities should expect about $37 million, or 20 percent less in state aid than was budgeted.
Comptroller Mychajliw declared a deficit under Section 2511 of the Erie County Charter. The Erie County Executive is on notice to provide the Erie County Legislature “a written proposal of actual remedies to overcome the deficit” in seven days. https://t.co/kOLIHZ72gL
— Stefan Mychajliw (@StefanMychajliw) May 4, 2020"Further, the travel industry has been devastated by social distancing restrictions as a result of the COVID-19 pandemic," Mychajliw wrote. "As such, I anticipate hotel occupancy tax revenue to fail to achieve budgeted revenue by $7,732,560."
Mychajliw also anticipates other revenues and fees to be impacted by about $34 million. He said interest earnings will be about $451,000 less than budgeted because of falling interest rates.
The revenue deficit only refers to the county's General Fund, though other deficits are expected in other funds associated with road, road repair, library, debt service, grant, and sewer.
As a "best case scenario", Mychajliw expects a $150 million shortfall.
With the declaration of a deficit, the county executive must provide "a written proposal of actual remedies to overcome the deficit" within one week. Once the comptroller receives the proposal, he has one week to respond with comments. Then, the legislature will spend three weeks to finalize a plan to overcome the deficit.
In response to the deficit, Erie County Executive Mark Poloncarz called the deficit declaration "premature".
"In the first quarter, we ended up with a $2.4 million surplus," Poloncarz said during his coronavirus briefing on Monday. "We had a bad April and haven't even gotten our first sales tax numbers in yet for April. We do know we're going to have significant shortfalls. We have time. This is not something that needs an immediate crisis situation where we have to slash and burn county government. My administration...will be coming up with a plan."
Poloncarz said their plan will have to factor in money given to the county from the federal government. Erie County is expected to receive $81.4 million, according to Congressman Brian Higgins' office.
