Executive Fiala Responds to Republican Legislators' Statements


(Binghamton, NY) Broome County Executive Barbara J. Fiala responds to Broome County republican legislators’ statements regarding the 2011 Proposed Budget.
  1. They said: The administration reported that sales tax figures are showing signs of improvement. However, it was the legislature that reduced the Administration’s inflated projection for sales tax last November by $1.9M. If that action was not taken, the County would not be reporting an increase at this time. We would instead be facing a shortfall this year.
Executive’s Response: First of all, what I reported in my 2010 Budget Message was that year to year sales tax figures are showing signs of growth. We took that as a positive sign that the economy is showing signs of improvement. What was proposed to be budgeted last year and what ended up being budgeted last year has no impact on the fact that sales tax receipts are indeed showing signs of growth year to year. Their (republican lawmakers) inability to grasp this concept is certainly concerning and should be a concern to their constituents. Also, these legislators all voted no on the budget last year and did not make any significant contributions in terms of ideas for cuts. So I am not really sure how they were instrumental in the 2010 Budget.
  1. They said: Although sales tax on clothing has been reinstated by the State, we have no resolution before us at this time at the County level. When and if that resolution comes before us, are we going to follow the State’s guideline as we have in the past? If that is the direction we follow, then the projection of $6 million in additional revenue is not realistic. The State has it in their plan to exempt the tax on clothing $55 or less in 6 months and then revert back to the original $110 or less clothing exemption in April of 2012. Therefore the $6 million may be phantom income.
Executive’s Response: What the state will do is an unknown at this time. State lawmakers have a significant hole to fill in their own budget. We will wait to see what action they actually end up taking when the time comes to reinstate an exemption.  However, Broome County’s plan is to take away the exemption through the 2011 budget and we will gauge what our plans will be for the following year based on our economic situation at the time. Also, lawmakers received a draft of the sales tax resolution on the day I delivered the budget message. We wanted them to see it even in its draft form, sooner than later. But certainly the final version is over in the legislature as we speak and is being incorporated into their resolution packets that they will receive this week. A simple phone call would have confirmed that information.
  1. They said: It needs to be noted that not one Republican legislator voted in favor of the 2010 budget with the $5 million in natural gas drilling signing bonuses included.  While in later developments, an agreement with Inflection Energy company would have brought a new source of revenue, that $16 million bonus payment would have been another one shot gimmick.  If the County takes the one time revenue to balance the budget, what’s the plan for the following year?  Where do we find another $16 million?
Executive’s Response: It was stated very clearly in the budget message that the entire gas leasing revenues would not have been used to fill next year’s budget gap. It was always intended to reduce next year’s tax burden, possibly reinstate some programmatic cuts and we certainly planned to put some away in the general fund as well as a tax stabilization fund going forward. I also stated I would have made many of the operational cuts regardless. So to reiterate, there was never any intention of using these revenues as one time “gimmicks”. Again, not one republican legislator voted in favor of the 2010 budget or made any significant contributions to the 2010 spending plan and based on these statements today, we’re not expecting them to have any significant contributions this year either. They simply like to vote no and then point fingers later.
  1. They said: We are awaiting the SGEIS from the New York State DEC before any horizontal drilling permits are issued.  Absent those guidelines and permits for horizontal drilling, our royalty payments on that proposed $16 million lease would be zero and remain zero until the infrastructure is in place and gas starts to flow through the meter.  When that will happen we have no idea, as the DEC continues to develop safe drilling guidelines.  We stand before you today committed to clean water and clean air, and safe responsible gas drilling.
Executive’s Response: The DEC is currently not issuing permits for large scale horizontal hydraulic fracturing in the Marcellus and Utica Shales. Natural gas companies are free to currently, and in the future, drill vertically and or drill horizontally in other formations. Therefore the statement that nothing will happen is not necessarily true. Regardless, the DEC has repeatedly said it will be issuing regulations when it finishes its process. To reiterate, however, we have not budgeted any lease payments or royalty payments as part of our 2011 spending plan. We again are not sure what the point of their statement is.
Their additional requests for a multi-year financial plan is certainly something everyone in government attempts to do with certainty, from the federal government on down to local municipalities. And we do look at trends (both current and historical) all the time to forecast our budgets. 
We are working diligently to restore our fund balance and we have been recognized for our efforts in that we have been able to maintain our Standard and Poors “A” bond rating in June of this year.


10/05/2010 - 4:48pm