Cover Story |
Barack's Gift to Erie Countyby Bruce Fisher |
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What will Collins and County Legislature do with $74.1 million in cash?
Before the end of 2011, Erie County will receive a $74.2 million windfall of unrestricted, unanticipated revenue from President Barack Obama’s Recovery and Reinvestment Act.
The money is real, and it is coming. This $74.2 million—which represents Medicaid relief—is also in addition to the rest of the money in Obama’s “stimulus” bill.
In fact, every county government in New York State will get some money from the same source. A total of about $117 million is coming to the eight counties of Western New York:
Erie $74.22 million
Niagara $16.39 million
Chautauqua $11.16 million
Cattaraugus $5.91 million
Wyoming $2.05 million
Genesee $3.36 million
Orleans $3.05 million
Alleghany $3.45 million
According to knowledgeable veterans, here’s how the money will come to the counties: First, there will probably a lump-sum payment of about $14.6 million for the period from October 1, 2008 through March 31, 2009.
Then, starting the first week of April, Erie County will get about $580,000 a week for the next 108 weeks. Here’s how that will work: New York State, which on Tuesdays takes money from every county government in order to pay for Medicaid, will take that much less from each county account.
And because Erie County has already budgeted for its Medicaid payments, this new-found extra money will have to be re-allocated by county elected officials.
That means that our county executive and the County Legislature will have to decide what to do with the money. They can’t just put it into reserves. And they can’t use the money to pay off debt. (Erie County’s debt is far, far below the debt carried by other New York counties, and is less than 15% of its debt limit anyway.)
So here is the test for our elected officials and for our community: What should we do with the money?
Federal action, local paralysis
County Executive Chris Collins and Buffalo Mayor Byron Brown may be about to thwart the policy proposed by the president, enacted by Congress and endorsed by most economists. And despite the economic downturn, we are still hearing the language of cutbacks when Nobel Prize-winning economists say that now is absolutely not the time to be cutting back.
It’s the express policy of the federal government to aid local governments so that they don’t have to lay off more people. America may have reached 10 percent unemployment already; the Obama Administration does not want more unemployment. So if the purpose of this federal spending is to prevent layoffs and, further, to generate jobs to replace those that have already been shed in this recession, how should we—here in Erie County, with our extra $74.2 million—do it?
We know what the think tanks and interest groups have advised: The Brookings Institution, the New America Foundation, the American Society of Civil Engineers and many others have published many studies demonstrating the need for infrastructure investment. That’s why you’ve seen so many news items about “shovel-ready” projects.
Some (thankfully, not all) of the “stimulus” money isn’t going to get used here locally unless the elected officials of Erie County government agree with the appointed politicians of the Erie County Fiscal Stability Authority, so that Erie County can go forth with its capital program. Things aren’t much better in Buffalo government. In the city, the Buffalo Common Council is going to have to come to terms with Mayor Brown or else the city’s capital program stalls.
But that still leaves Erie County’s extra $74.2 million.
Ideas, please, and hurry!
A very senior Buffalo philanthropist believes that this $74.2 million county windfall must be immediately put into an account that is completely and solely dedicated to sustaining the Olmsted Parks. His theory is that soon, interest rates will climb back up to a reasonable level (currently depressed, he suggests five percent as a historic norm), and that a trust or dedicated fund of more than $70 million would yield $3.5 million a year for as long as the trust stayed in place—enough to sustain the regional asset known as the Olmsted-designed urban parks system.
Not a bad plan, say I. The problem: The job-creating impact of setting up an untouchable trust would be minimal in the short term. But this is a good thought, so our elected officials should chew on it. Putting half the money into a trust (say, $35 million) would yield enough money to cover the $1 million gap that the county says the city needs to pick up to maintain the parks. As about 29 percent of Erie County resident live in the city, it’s hardly a bad idea to use these funds to sustain the livability of the city—especially because Olmsted is much, much more than just a local park.
As for the rest of the money, some observers nudge me that it needs to be spent now. Regional unemployment is going to be even worse, they say, if there isn’t some extra construction right away.
There is plenty of work to be done in the next two years while the windfall comes in, Tuesday after Tuesday.
And even the least aesthetically oriented observers point out that now is the time to bolster our arts organizations—especially those that have been looking to well-heeled donors—because it will be two, three, or more years before the well-off feel well-enough-off again to make the kinds of philanthropic gifts that they were making in the Bernie Madoff years.
The theory so far, in short, is that our elected officials need to safeguard our quality of life and get going on some construction projects, too.
Can money buy sense?
What can money buy? Roads and sewers and parks and culture, yes.
And then there’s the rest of tomorrow.
There is regional planning to be done so that we plan rationally for realities, the biggest of which is that we will be a smaller community.
There is healthcare planning to be done, in tandem with housing plans and workforce plans, because in a region where over 25 percent of the population will be over 60 in a few years, there will be a big need for age-appropriate housing and for younger people who are trained to help older folks get along.
Our region should get focused today on investing in housing inputs and neighborhood amenities so that older folks stick around in their own houses, in their own neighborhoods, rather than abruptly sell off their homes so that they can either flee or jam into assisted-living centers.
A new politics of community revitalization should be focused squarely on helping that population of older folks stick around in our region, which, like every other Upstate urban region, will have a chance to revitalize if and only if their capital and their talents stay rather than leave.
But if county officials buckle, and if the community lays low, you can bet that the usual ravenous corporate wolves will be at the county’s door, demanding $74.2 million for the usual list of magic-bullet projects, promising instant uplift if only we choose them. You know the list.
Federal policy is raining money on our region. The political class here has a simple job to do: to put the money to work. If they’re not up to the job, what will the community do?
Bruce Fisher is visiting professor of economics and finance at Buffalo State College, where he directs the Center for Economic and Policy Studies.
Reader Comments
Pug Ugly 19 Mar 2009, 13:47
Nothing. Western New Yorks track record on things like this is less than
stellar. We as a community seem to revel in corruption and waste. I guess
it's understandable since corruption is the leading local industry.
Jackstraw 20 Mar 2009, 12:36
Dole it out to the citzenry. Buffalo pols will just spend it on new studies
for projects they will never get done and nobody really wants.
Joseph A. Defetti 20 Mar 2009, 20:53
The article notes that this is a prelude to stimulus money, so the first
thing that should be done is to create a Department to Certify Shovel-Ready
Projects so that unlike now, we are prepared for when the stimulus funding
becomes available. This will require executive and support staffing,
facilities, office furniture and business equipment, supplies, a fleet of
vehicles so that management can visit potential shovel-ready sites,
official certification seals, and multi-million dollar retention bonuses
for each of the top department executives. The new agency will generate
revenue and become self-perpetuating by requiring businesses seeking
shovel-ready certification to pay an application fee, a review fee, a
visitation fee, and all the other permit fees normally required when doing
business as usual in this area. Oh sorry, I meant bribes.
Artvoice Fan 23 Mar 2009, 09:47
Bruce Fisher: It's uncanny to think that the author of the red/green budget
has the audacity to offer budget/spending advice to a successful
businessman like CE Chris Collins. While olmstead is a cultural landmark in WNY... Fisher's proposal to put all the stimulus money in a trust is Ironic... coming from the same gentleman who squandered millions in Tobacco settlement money to cover the budget shortfalls he created as part of the corrupt and inefficient patronage pit of an administration under Giambra. It reflects poorly upon both Artvoice and Buffalo State that they would allow this Hack to represent them.
brian quinn 23 Mar 2009, 20:37
hey bruce. i'm no economics professor but this $74.2 million can hardly be
described as "free money." if you think it through you may realize that
someone (real working people) are actually on the hook to pay this back,
with exponential interest. I know you are probably still in the throes of
some democrat/obama mancrush but calling this fake money "barack's gift" is
patently offensive. let's do the math... 75 million divided by one million
people in wny = $75 borrowed per person. one trillion dollars divided by
250 million americans= $4000 borrowed per person. hmmmm.... maybe i should
get an economics degree. how our local officials will squander this fake
money is irrelevant.
Steve yung 23 Mar 2009, 21:12
Given New York's track record for handling it's budgetary responsibilites,
it doesn't seem likely that anything truly useful will come of it. It's
just another handout as a reward to the people who got us into this
situation in the first place. The government caused most of these problems,
and now we foolishly look to them for the solution.
Art Voice Reader
24 Mar 2009, 09:58
Well I don't know anything about economics or much about "Urban Planning,"
and I am not a mom, I do not have a child, I do not live in a crappy part
of Buffalo. So if this is not a "money generating" idea that will take
Obamas money to make moooore money, I understand the lack of appeal, and my
apologies. But I just feel when I drive to the East Side some days for
work, ex. down Walden, that I dont understand how people can talk about
improving parks when we have live-in neighborhoods that are aweful. There
are quite possibly kids who have never seen green grass in their
neighborhood before. And they may have no need or desire to go to "Olmsted
Parks" but it would surely be nice if they could see some green grass out
their window and maybe a tree, where there has never been one--instead of
dried dirt, and tons of glass and who knows what else. Also a while back some article came out in some magazine ranking all the highschools. Well my highschool was in the lowest 25% out of the whole U.S. -- Lafayette. And there are plenty more in Buffalo, falling apart, while only a small fraction of Buffalo highschools stand tall and proud with all their monies--all the rest are falling apart, as are the futures of the children that attend them. So I understand the idea of beautifying things, people, and places that can attract more people to Buffalo or whatever its purpose be, but then I think, well yes, the more and more dirty, danky, and unlivable some of these other areas of Buffalo become, the more THOSE people will continue to expect that that is all they deserve, that is all they should produce, that is all that they are worth, and possibly just continue to perpetuate such a bleak existance and environment because they dont know of anything better. Can we just do something nice and helpful, no strings attached here an there? Or is Buffalo just not capable of that kind of thinking? Or is Obama? Are there strings attached to this money? Or is he being generous, like we should be in return in the way we use it? Leave a Comment:
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