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Goodbye, to that old black magic

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We hold these truths to be self-evident: 1) You can't cut taxes and maintain the same level of services; and 2) Even acknowledging the truth of the first, people will punish the candidate who says tax increases are a possibility.

But Bill Johnson's not the only person who says Monroe County might have to raise property taxes to deal with a budget deficit. Despite Maggie Brooks' pledge to continue the Doyle legacy of freezing the property tax levy, several Republican county legislators say a property tax increase might be necessary this year.

For a moment, it looked as if Jack Doyle had pulled a rabbit out of his hat, again. Faced with a $40 million to $50 million deficit and a budget deadline that fell right before the county executive election, chances were that he'd have to cut popular county programs and services so deeply that he'd infuriate voters, or go back on his word and raise property taxes. That would help Bill Johnson, the Democratic candidate for county executive. It would hurt Johnson's opponent, Republican Maggie Brooks.

Instead, Doyle seemed to have finessed the Democrats. He closed much of the budget gap with an increase in the sales tax (which many voters seem to find painless). He actually increases funding for some popular arts programs, which would please suburban voters. And the majority of his cuts hit city residents (who'll vote for Johnson anyway) and the poor (many of whom don't vote).

But Democrats in both the county legislature and state assembly insist that the sales tax proposal is going nowhere. A change in the sales tax rate must be approved by both the state senate --- where Republicans rule --- and the state assembly. Dems have a lock in the assembly and have proclaimed the sales tax hike dead on arrival.

That could throw the county into financial chaos --- and make the Democrats look bad.

But late last week, there were strong signs that the Doyle proposal has waning support among local Republicans, too. They may even be willing to vote for a property tax increase.

"I'm sure there are a number of legislators who would support a property tax increase," says Republican County Legislator Mark Assini. "It's possible there are enough votes for that."

When pushed, Assini adds that a property tax increase is "a likely scenario."

"If I were a betting man, I'd say that probably will be the way this gap is closed --- a property tax increase."

Both Assini and fellow Republican County Legislator Ray Santirocco say it would be pointless to approve a sales tax increase, knowing the assembly won't go along.

"I wouldn't vote for it," Assini says. "How could I vote for a revenue stream that doesn't exist?"

"It's a dead issue at the moment," Santirocco says. He has no reason, he says, to believe the assembly will go back on its pledge to kill the increase. If the county lej approves the Doyle proposal as is, he says, it will include the "phantom" additional sales tax revenue and "I don't know if we want to do that."

Santirocco was one of six Republicans who voted for a property-tax increase to solve last year's budget problem. The others were Pieter Smeenk, Karla Boyce, Mike Hanna, George Wiedemer, and Peter McCann.

Santirocco calls Doyle's insistence that a property tax freeze is necessary to draw and retain businesses and jobs to Monroe County "overstated." The decisions businesses make have more to do, he says, with the incentives the county offers through COMIDA and other programs.

But Republican Majority Leader Bill Smith says he and other Republicans will try to balance the budget without resorting to a tax increase of any kind. That means cuts.

"At this point, everything has to be on the table," he says, adding that, in terms of preservation, priority will be given to programs and services that get the most use, including libraries, parks, highway maintenance, and public safety.

A tax increase, Smith says, is "a last resort."

But Santirocco argues that gutting $40 million from the budget would destroy the fabric of the community.

"We just can't do that," he says. "It's unrealistic to think we can do it [balance the budget] with future cuts."

If the sales tax increase dies and the cuts don't happen, the legislature will "have to look seriously at the property tax," Santirocco says.

The Democrats are hanging tough. Sales tax makes Monroe County noncompetitive with surrounding counties, Dems say, and hits middle and low-income people the hardest.

"There's no sympathy for the sales tax [among Democrats]," says Stephanie Aldersley, Democratic leader in the county lej.

Doyle's proposal, say county and state Democrats, is an attempt to put Monroe County's fiscal problems on the shoulders of state representatives. Democrats worry, too, that it will set a dangerous precedent for other counties in similar financial straits.

Privately, state Democrats worry about voter retaliation at the polls should lawmakers approve a jump in the sales tax. They also dislike the county's plan to keep the entire six-tenths-of-a-penny sales tax increase itself, instead of sharing the additional revenue with the city. And state Dems are smarting over Doyle's refusal to give them a heads-up that the sales tax proposal was in the works.

"We found out about it the same way as everybody else, through the press," says a spokesperson for state Assemblyman David Gantt. "At the very least, he should have called them beforehand."

Monroe County has three options, according to Republican State Senator Joe Robach: raise sales tax, raise property tax, or cut services. He hopes the county is "exhausting every means they can" before voting for a tax increase of any kind.

"They have a challenging task," he says.

The senate would probably approve the sales tax proposal, Robach says, if it makes it that far.

"They [Monroe County] are the ones responsible for making the decision," he says, adding that the senate historically tries to honor the will of the local municipality.

Even if the sales tax proposal is enacted, it's, at best, a temporary reprieve for the county, say local lawmakers.

"What we have is a real structural problem," says Democratic County Legislator Carla Palumbo. "This doesn't solve it."

"It won't make it an easy ride," adds Santirocco. "It would get us some distance, but I don't know how far."

Doyle wants the sales tax boost to offset ongoing increases for Medicaid, public assistance benefits, and employee pension costs. Mandated expenses, he says, are driving the county to the brink of ruin.

Assini offers a dire prediction. As long as the state continues to expand programs like Medicaid, he says, county governments will start to shrink.

"It will not be long before those mandates will force county governments to go out of business," he says. "I predict within 10 years."

Devilish details

Every budget is, at best, a prediction. And County Executive Jack Doyle's 2004 budget for Monroe County is no exception.

In many cases, revenues and savings are based on learned expectations, forthcoming grants, or impending efficiencies. But there are a few predictions in Monroe County's 2004 budget that seem soft. Following is our list of budgetary projections worth watching:

Frontier fairy tale: When Frontier Field was built in 1995, then-County Executive Bob King promised it would never cost taxpayers a penny. But from 1995 to 2002, the county has spent $8.9 million more on Frontier Field's operating costs than it has received in revenue from the stadium.

This is due, mainly, to the 20-year lease agreement the county signed with the Rochester Red Wings. In the same period that the county subsidized Frontier by nearly $9 million, the Red Wings have reported $4,064,473 in net profits.

Under the terms of the Wings' 20-year lease, the team would pay more if its season-long attendance tops 300,000. The Red Wings consistently fall short of that number.

The facility, which opened in 1996, cost roughly $41.5 million to build. The state pitched in a $16 million grant toward construction costs, but the county covered much of the rest of the expense with county-backed bonds. The county still owes millions on the stadium, and servicing that debt costs county taxpayers about $1.7 million a year.

Late last year, County Executive Jack Doyle decided to redirect roughly $700,000 in annual income generated by an increase in the hotel occupancy tax toward debt payments on Frontier Field (the money was initially earmarked for PaeTec Park). But even with that money, it has left the county with about $1 million on average to pick up every year.

The 2003 and 2004 budgets both call for the county to break even on the stadium. In 2002, the county had to subsidize Frontier by $424,176.And the beautiful sports facility's finances won't improve much next year, when its second-most-important tenants, the Rochester Rhinos, leave for their own facility nearby.

Crime might pay: Monroe County's 2004 budget includes $3,560,500 in anticipated revenue from "jail facilities charges --- federal & local." (This is money other governments pay the county to hold prisoners waiting for arraignment.) Last year, the county pulled in $1,082,000 in the same jail facilities charges. Why the huge increase? The budget says it's due to "a negotiated increase in the daily rate and also based on experience and expectation of an increase in the number of inmates housed."

So what's this expectation based on? And is it safe to assume the county will be able to pull in more than three times the projection for 2003? (The 2003 fiscal year is not over yet.)

Blood from a stone: The county is anticipating nearly $3.6 million in savings after "implementing management consulting firm recommendations." This is the type of top-down approach to efficiency for which Doyle has drawn criticism. Instead of having consulting groups determine the amount of potential savings, Monroe County seems to be giving them specific monetary goals to shoot for.

The county insists that it will save $30 million in 2003 due to reforms in the Department of Social Services. That's about what the county predicted it would save. But critics say that's not likely, since the county had predicted that welfare caseloads would fall. Instead, they've gone up.

The big turnaround: Jack Doyle is predicting that the economy will start recovering soon enough to impact the 2004 budget. Even without his proposed sales tax increase, Doyle expects the county to receive more sales tax revenue in 2004 than it did in 2003. In fact, he expects that revenue to increase by nearly $2 million, from $114 million to $116 million.

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