05.03.10

SCHUMER PLAN WOULD INJECT $165 MILLION INTO WESTERN NY TO RELIEVE LOCAL BUDGET WOES

Schumer bill would send $116 million to Erie County, $17.6 million to Chautauqua and $31 million to Niagara to help with property taxes and alleviate essential service cutsSchumer, Giambra promote bipartisan state and local aid effort that would send $2.5 billion to New York State, with half going directly to local governments

Standing with Erie County Executive Joel Giambra, US Senator Charles Schumer today unveiled a plan that will go a long way toward fixing New York's budget deficit by providing $2.5 billion to the state and its localities in direct federal aid. With local governments facing the prospect of raising property or sales taxes or cutting essential services, Schumer estimates that his bill could send about $116 million to Erie County; $31.1 million to Niagara County, and $17.6 million to Chautauqua County. Buffalo could receive up to $36 million.

"New York is still reeling from the blow of 9/11," Schumer said. "If there was ever a time that we needed an emergency infusion of federal dollars to help solve the fiscal crisis that threatens to cripple our economy and undermine our State's quality of life, this is it. The bill that Senator Snowe and I are proposing is intended to help stop the bleeding. It will hopefully keep the state and our local governments from being forced to take drastic measures such as cutting essential services like Medicaid, police, and health care or further raising taxes."

Schumer's effort was spurred by the acute fiscal crisis currently being felt in New York and throughout the county that are forcing local governments to consider raising property taxes or curbing essential services. In Niagara County, for example, in an effort to keep the property tax hike to 3.7 percent, legislators have proposed millions in budget cuts - cuts that would close all county parks, abolish the Sheriff Department's road patrols, and eliminate all nonmandated services from the Department of Health. The base budget for 2003 would eliminate funding for 23 outside agencies, including programs to aid victims of domestic violence, AIDS management centers, and drug prevention programs for nonviolent criminals.

The City of Buffalo, plagued by longterm fiscal problems, anticipates a budget shortfall of $66 million within the next five years, with the budget shortfall for this year expected to be $28.6 million. To date, the budget cuts have resulted in police layoffs, the temporary closing of two fire stations, and the elimination of city aid to cultural and human service groups.

States are facing their worst fiscal situation since World War II with budget deficits estimated to be as high as $90 billion. Since almost all states are required by law to balance their budget, these fiscal conditions are forcing states throughout the country, including New York, to make difficult decisions about whether to raise taxes or cut essential services. In New York, the deficit's percentage of the state budget is estimated to be in the range of 20% or more. To deal with this shortfall, New York is considering a tuition hike at public colleges, Medicaid cuts, and fee increases. New York is also struggling to find ways to pay for new homeland security expenses, including patrolling ports, bridges and tunnels, and training emergency personnel.

To make matters worse, the burdens on the states are coinciding with the highest national unemployment levels in years. The slump in the job market is the longest in decades with payroll in the manufacturing sector down for the 29th straight month in December. Overall economic growth has been very low, and is not expected to increase in the foreseeable future with many economists projecting growth of less than 2%. The nest eggs that families had saved for their children's education or family emergencies or their own retirement have been wiped out by the declines in the stock market, which in 2002 had its worst year since 1974, down approximately 23%.

In an effort to help communities in New York and throughout the country deal with declining revenues and budget shortfalls, Schumer has introduced legislation with Maine Republican Senator Olympia Snowe that would send $40 billion to states and localities throughout the country to help them weather their current fiscal crises. The first $20 billion will be allocated to each state based on population. The second $20 billion will be allocated based on the change in each state's unemployment level from 2000 to 2002. Half of the total amount of aid going to each state will go to local governments.

Overall, New York is expected to receive approximately $2.5 billion from the plan, with about $165 million going to the Western New York counties of Erie, Niagara, and Chautauqua. Counties, including an estimated:
• $116 million to Erie; including as much as $36 million for Buffalo.
• $31.1 million to Niagara, including approximately $7.9 million for Niagara Falls.
• $17.6 million to Chautauqua, including about $4 million for Jamestown and $1.7 million for Dunkirk.

"As the federal government starts debating how to stimulate the national economy, we must remember that our states and cities are important partners in any recovery. This bill will help struggling cities and counties that in turn will take a big step towards getting our economy back on track," Schumer said.

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